Counter Netflix Pro.
1. Sure, you can take as long as you want to watch a movie from netflix ...but why does that matter with the iTunes? You don't have to put them in a queue and have them shipped to you ...you simply sit down when you feel like it and hit play.
It's been talked about many times. Say you have kids and a life and can't watch an entire movie in one sitting. Say something comes up in the middle of a movie and you have to pause it until the next night. Say you only have small windows to watch movies in.
I'd much rather sit down and watch a whole movie straight through every time, and by and large I do. But, a few times a month at least, I want to watch a movie and don't have the time available to watch it right then, so I watch half one day and half the next day or the day after. Just last night I watched the first half of a movie while working out, and I won't get to the second half of it until tomorrow night.
Ask yourself this: aside from the above scenarios and the tendency for people to double-rent movies when this happens, what is in it for the studios to put this 24-hour limit on their movies? Before you claim that the above is so rare as to not matter, consider this: it happens enough that studios are willing to endure bad publicity so they can make the few extra rental fees off customers.
2. The quality of the iTunes movies are very good. No, they aren't 6000kbps ...but they aren't full of artifacts either. Half the time I end up ripping the DVDs i get from netflix because I don't have time to watch them within the month anyway. I get compression either way
I'd have to disagree with you here. I see massive compression artifacts in TV shows I've bought from iTunes, especially in the dark regions. If you want to rip a movie without compression artifacts, you just rip it at a higher bit rate! Granted, you can't "undo" the damage of the original compression, but you certainly don't need to end up with a worse result!
3. I don't own an AppleTV ..I may NEVER own an AppleTV. My 24" iMac is in my living room ..I watch the content on it.
And you won't be getting HD or 5.1 surround out of it either. And you're a distinct minority, I'd wager. But, true. You saved $229. The general consumer will not.
4. Immediate availability to new releases is definitely a pro ..but then again, I can just go down to my local video store if I want to see it that bad. Chances are I would have already watched it in the movie theatre anyway...
5. They may have 90,000 movies ...but I've run out of old things I want to see!
These two don't make sense together. If you watch most movies in the theater, then you don't have "new things" to see either.
6. there is a 30-day penalty at netflix as well. If you don't return the movie you don't get another one shipped to you
If you have a movie from Netflix and decide you want a different one, you return that movie and get the new one, a penalty of approximately 2-3 days (depending on where you live).
Again, this goes to the spontaneity aspect, which is the main

TV Pro.
7. Queue management is a plus as well ..although when you have run out of things to watch ...your queue is pretty baron anyway.
Those are reasons I will be dumping netflix next month (or at least putting it on hold) ...that, and those times when a friend comes over and you start talking about a movie and you want to watch it right then ...netflix can't come through on that one unless it's in their watch now section (highly unlikely)
As I said, there are Pros for

TV. Being able to think of a movie and watch it within minutes (assuming it is available) is a major plus. It sounds like that outweighs the Pros for Netflix in your case.