I would argue that while downloading/streaming is a small part of the reason for their demise, at this point, Netfilx (by mail) /Redbox killed them just as much. I used to hit up Video Vault for the slightly more obscure stuff that is now so easy to rent on Netflix, rather than schelpping to Old Town and then schlepping back a day or two later.
Thing is, they carry a lot of really obscure stuff that Netflix doesn't. I guess you might be able to torrent a lot of it, maybe, but it's not exactly the same. As for their supposed political leanings, that may well be true, but it didn't keep them from carrying the most underground/controversial movies...I'll miss the dusty-museum quality of browsing there.