I agree with your thoughts. I believe this has tremendous potential! At the current price the risk/reward is quite low imo.
I also believe pps could drop a bit lower, but I'm hedging that possibility against the PROBABILITY that it will go much higher once production of boxes begins on a larger scale.
I can count how many times I waited to return a red box movie because someone was perusing for long time- HUGE, HUGE design flaw by red box- one which I'm very surprised they did not correct (most likely did not wish to spend $$$ to retro-fit with another slot).
I am confident their reticence and complacency to retro-fit and produce new with two slots will continue to cost them significant market share; expecially when consumers have an alternate choice such as SPOT Rentals! Just like Kmart was obdurate to pay attention to what Wal-mart was doing 20 years ago- Kmarts are now ghost towns.