It is rather astounding that someone at Dish thought this was a good idea.
Dish-head #1: "Let's reserve 100GB of their expensive HD DVR disk space to save SD movies."
Dish-head #2: "Hmm ... not bad. But how much should we charge for them?"
D-H #1: "Well, we charge $3.99 for SD PPV movies. But for the shear novelty of being able to watch them off of their own hard drives, let's raise that to $4.99!"
D-H #2: "Do you really think they will pay extra for movies that are eating up their drive space?"
D-H #1: "No doubt at all! And to top it off, rather than give them unlimited viewing once they pay for them, like we do if you record a PPV event, we're going to restrict it to a 24 hour period."
D-H #2: "Wow! That would be great for us! God bless America!"
D-H #1: "Yes, God bless America!"
King Dish-head: "I have been listening and highly approve of your ideas. Let it be so!"
And thus VOD was created from out of the void. And it made sense because King Dish-head said it did.