I think people need to set their expectations and know what to compare with.
You are right, their streaming catalog of around 17,000 titles is nowhere near their DVD catalog of like 100,000 titles. You should really be comparing this service to The Movie Network, a subscription-based service, with older movies than in the theatres. Netflix is not a threat to Pay Per View and does not intend to compete at that level; the movies Netflix will show are usually on DVD, and usually even 1 month after they were released on DVD.
I like that they are constantly adding to their library. Their latest deal is likely going to bring much-needed, valued content to this library. (Epix=Paramount, MGM and Lions Gate)
I'm anxious to see for myself what the selection will be like. The possibility to watch past seasons of TV shows i'm interested in sound nice. Then again, I set my expectation; I would not have access to the latest season episodes, only past seasons episodes.