This makes it worse. It means there wasn't an underling cause important enough to split the company. Like licencing deals or possible acquisition that couldn't be disclosed etc.
This way, it is not a total reversal, just a reversal of the customer facing changes that were generally disliked.
If the split was primarily so that they could go to Hollywood and say "No, we're just a streaming company, that DVD division is over there so just negotiate with us", I've never thought that would work. They weren't going to fool anyone.
I bet they weren't surprised by the customers walking or even the number of angry customers; I bet they discovered nobody in Hollywood was fooled and suddenly inclined to change even one letter of their contracts simply because they had "divested" their DVD product.