The source for most movie rips today is Bluray, which is already an encoded medium. Yet Bluray remux's are not the common distribution format.

Yea you are technically correct, but if the distance from the original is just a handful of encodes, good luck noticing any lower quality that's not simply due to poor encoding settings. And when a proper encode can be a 10th the size with hardly any drop in quality, in a video file you might view <12 more times in your life, does it really matter.