Lol... VCDs and Cams aren't going to bankrupt hollywood. Like you said, they're barely watchable.
It's piracy of the screener DVDs and Region 5 DVDs that they are probably concerned about. Those are what the "scene" uses for the majority of their early releases.
I suspect netflix and the streaming services have more of an effect on sales than piracy. If I can rent (and copy) a DVD for less than a dollar, why bother with a poor quality pirated copy?