They should absolutely be forced to provide either a refund or a downloadable copy, this is absurd. It sounds like they didn't actually have the license necessary to be able to sell these movies in any reasonable way.
Some warned that everything would work that way eventually anyway, and everybody (including me) blew them off.
Well, they were wrong, weren't they? The way it works now is much worse: what you're purchasing is a license for playback for an indeterminate amount of time, which can be arbitrarily and unilaterally terminated by the provider.