The stupidity-ball explanation is always a contender in cases like this, but I wouldn’t rule out A or B either. Yes, the studios have tech consultants, but they had equally good consultants when they chose the horribly misdesigned CSS as the encryption scheme for first-gen DVDs, which suggests that they don’t always listen to the consultants.
There’s an interesting connection to antitrust policy here. Microsoft’s business strategy is apparently to tie Media Player to Windows. Antitrust authorities, in Europe at least, didn’t like this, and so Microsoft is claiming that Media Player is an Integral Part of Windows and not just a nice application that is designed to work well with Windows. (Recall that they tried the same argument for Internet Explorer in the U.S. antitrust case, and the U.S. courts didn’t buy it.)
This may affect the DVD cartel’s decisionmaking in at least two ways. First, if they fell for the line that Media Player is not just another pretty app, they may have concluded that it made sense to hold Media Player accountable for the Windows “bug” of allowing unsigned drivers. This makes no sense from a content security standpoint, but remember that these are the same people who thought CSS was a good idea.
Another possibility is that the DVD cartel is implementing its own antitrust policy, encouraging competition in the market for Windows-compatible DVD players by neutralizing Microsoft’s tying strategy. Having acquired quasi-governmental power to regulate the design of DVD players and the structure of DVD-related markets, the cartel would naturally want to prevent any player vendor from accumulating market power.
In that same post, Ed links to fascinating testimony on the Swiss DRM bill, which apparently takes a much more sensible approach:
...I would like to point to some of the characteristics of the bill that I find particularly commendable:
* The bill only prohibits the circumvention of effective technological protection measures aimed at protecting copyrighted materials.
* The bill includes a definition of the effectiveness criterion.
* The ban cannot be enforced against individuals who circumvent TPMs in order to make use of the work in a way that is traditionally permitted by the copyright act (e.g. making a private copy).
* In contrast to the EUCD, all the exceptions and limitations also apply to on-demand services.
* Although the bill creates civil and criminal liability, it adheres to the principle of proportionality with regard to sanctions and penalties. In the context of criminal sanctions in the case of circumvention of TPMs, intent (”Absicht”) is required.