Yes, I do remember when they shuttered TV show rentals. The only reason they gave is that users preferred to buy TV shows. I find that hard to believe although I could be wrong. Charging people $1.99/$2.99 to purchase an episode of a show means $20-$30 for a season (sometimes more). It makes more sense to just pay for cable at those prices, which I refuse to do.
Apple has been pushing for less DRM, not more, and would rather people bought into their platform without being held hostage.
It is not an easy thing to convince publishers that no DRM is the way to go, yet the music companies reluctantly agreed. Considering Apple is the number one retailer of music, ahead of Wal-Mart, this seems to have worked out quite well.
Rentals are hard to market because in the digital domain you have the same media file as you would if you had "purchased it", only the licensing is different. Charging hotel-room prices for movie rentals will not translate to many sales. Netflix has the right idea for rentals. Low-quality streaming, flat rate pricing.
Amazon was an important pioneer in selling DRM free MP3 files, but they couldn't break the back of the whole industry like Apple managed to.
As for the App Store DRM, I'm not sure how that's any different than Steam, which everyone seems to agree is a great model for both customers and developers.
Apple's App Store and Steam both allow you to install the same application on multiple devices.
I'm not sure if you can point to a better model that's been successful in the past. Some indie developers have done alright with DRM free games, but they depend on community goodwill to keep themselves profitable, something a large corporation has a much harder time doing.
At the low end 40$ a month * 12 month/ 40$ a show / year = 12 shows. I don't know about you, but I don't think many people watch that much TV excluding reruns. But, I do know plenty of people that pay 100$ a month for cable.
