It takes ~2 hours to play the film, you can't make any noise in the room during that time, and the resulting picture and sound quality will be terrible unless you've got very expensive recording equipment. Content producers would love to get to the point where that's the only way to 'copy' films.
You're right about the time it takes to copy. Whenever I've encoded video it's always been a time-consuming process so I wouldn't see this as a major obstacle.
As for picture and sound quality being terrible, simply not true. Recording from a projected image is one way to do telecine, and it works fine if you can set it up properly. [1] A half-decent telecine is very different from surreptitiously recording a film in a cinema.
The stream will be re-compressed but this isn't such an issue as many people think. Back when TV was recorded on analog tape in the 90s, you were allowed 8 generations of copying and it would still be considered acceptable for broadcast (for news).
