They had absolutely no reason to "jump ship", since they had the perfect business model to smoothly transition without pissing people off. Netflix has, for the past 3 years, been a mediocre-at-best streaming library with a backup of every DVD on the planet which would be shipped to you in 2 days on request. Once they get every studio in the world to put their stuff on streaming, then fine, cancel the DVD branch. But if they're looking to avoid alienating customers, how much does it cost them to keep the DVD branch around to provide backup coverage on things that can't be streamed for contract reasons?
At the very least, they could be up front about it: say, "Look, rising costs on the DVD side require us to raise fees. We think our catalog is strong enough that most people can go streaming only, and we recommend that you do so if possible, but we're keeping the DVD service as an option for those who want access to more rare or more recent releases."
As more things become available on streaming, they could naturally spin down that side of the business. Repurpose staff, sell off inventory, close warehouses, etc. Presumably they've already been doing that if they had any sense. If there are parts they can't ditch because they're in use, then that should be a sign that streaming isn't good enough yet.