Right. To play legally purchased blu-rays. Who pirates movies and then burns them on a disk? And if someone did do that why would they be using a gimped blu-ray player instead of a media PC?
The only thing this scheme was ever going to catch was full blown counterfeit disks sold on a street corner to your average joe. I think that was only ever much of a thing in the developing world. Or was it just before my time?
The idea would be that when you see a recording of a Blu-ray, you can track down who bought the Blu-ray. However that part was never implemented. However it WAS implemented on Netflix which is why pirates don't like using Netflix as a source. Any time a pirated movie is released from a Netflix source, that person gets blacklisted from Netflix because it's watermarked with their user ID.