It was reusable. The idea was basically the current iTunes model (rent for two days or buy forever) except with abstracting the license from the data since internet speeds weren’t fast enough to stream video.
So you’d “buy” or “rent” the license to watch the disc. Once your rental was up, you could give the disc to a friend who could buy or rent it. The idea was to basically use sneakernet to handle the heavy lifting and the internet just for license/DRM purposes.
Considering people today are willing to pay $10 to “own” a movie that’s on some server they will never see, it really wasn’t a terrible idea. Especially since the licenses were stored on the hardware, so your movies would continue to play even if the server shut down. It’s just separating content from rights management is a really abstract concept and they didn’t do a good job explaining it.
See also: people getting upset about day1 DLC being included on the game disc, but have no issue buying a digital download.