I wasn't crazy about the price increase, but for me the cost is still worth it. My wife and I use NetFlix almost exclusively for watching television series that we never watched when they were actually on TV. For example, right now we're plowing our way through "Lost," "Breaking Bad," and "Rescue Me." Generally, we go through one or two DVDs per week since we don't really watch a lot of stuff on regular commercial TV at night. So even if we're only averaging 6 DVDs per month, that's $1.66 per DVD and that includes the postage.
I always thought their pricing model was generous and I've been telling my wife since we signed up "they're going to spend a few years getting people hooked on this then they're going to jack the prices up"
Sure enough, that's just what they did when the opportunity (splitting the streaming and DVD by mail service) presented itself.