A DVD is usually very much more affordable for the library to purchase (and own permanently) than to license or purchase online streaming rights. If a video is to be shown only in a physical classroom, or students can physically check out a DVD on reserve, a DVD is much more cost effective.
The library can facilitate the process of converting library DVD content for limited course-related reserves when appropriate copyright conditions are met.
OIT has guidelines on converting a DVD for online use. If a video is only available on DVD (and there is no commercial online streaming license available for purchase), weighing the four copyright fair use criteria usually works in favor of fair use.