DIVX may be compatible on your computer, but I don't know many people with a 27" or larger monitor and half-decent sound system on their computer. Add'ly, when you can get a good quality set-top player for as low as $200, why would you bother using a far more expensive computer to do the job, and often times not as well?
I got news for you: Technical merits or mpeg2 and mpeg4 aside, the end result is what makes the difference. I can't put a DIVX cd (unless it's a VCD?) in my set-top and expect it to play. I don't want to have to spend through two hours wading through pr0n banners and screwed up servers trying to find a movie on DIVX.
The movie has to get encoded, SOMEHOW. If you HAD it on DVD, why would you waste the time and disc space encoding it?
There's only one answer to that--so you can share it illegally. DIVX has one chief function--to allow cheapskates to get movies without paying for them. It doesn't matter if there's legitimate uses. There were legit uses for Napster and there's legit uses for pot, and look where those are in the legal food chain...
It's not the same as ripping all your CDs to MP3. Having a vast juke box of movies is pretty silly sice you aren't going to play them at random and sit through any great number of them at any time. Seeing as you have 90 min or more before you have to swap DVDs, that's really no comparsion to CDs where you'd have to swap them every 45 min or so.
I have lots of friends that have vast jukeboxes of DIVX movies. And I know what they do with them.