Except that the firmware in DVD burners is explicitly designed to not burn the part of the disc where the CSS keys are stored
They're designed not to
copy the part where the keys are stored. They certainly read and write these sectors, otherwise they would be of little use in storing data. They could easily write a new key for authorized copies.
What has been proposed in the original article is not a way to duplicate a disc without decrypting (which would completely undermine the point of CSS), but a way to decrypt the data and simultaneously apply some other form of DRM to the result.
Which is the exact same thing. A licensed copier would decrypt the disc, copy the disc, and reinsert the appropriate encryption at the end. The result is a product that does not break the encryption on the disc. "Breaking the encryption" is not the same as "decrypting." "Breaking" involves taking it out and throwing it away, whereas "decrypting" is part of the normal process for playback (and indeed for a hypothetical backup/storage system).
The problem with copying is access control. One license to the media should and does correspond to one usable copy of the contents. The reality is, though, that creating multiple usable copies leaves room for unlawful use. Activating/deactivating copies (a la iTunes account management) is certainly a solution, but it's one that standalone players cannot embrace ("Please connect your DVD player to the Internet to play this disc" wouldn't go over well with older generations of customers). There's also the "trust the customer" approach, but customers seem to have forgotten their end of the deal. It's not
their movie. Metonymy seems to have clouded the minds of modern people--it's their
licensed copy of the movie, a copy which does not grant them full control.
In my opinion, the best solution is to forget about trying to prevent copying and ditch physical media altogether. Give people a good system for casual sharing with friends (for example, mark a mix as "for Sarah Generic" and aggressively pursue people in possession of large quantities of unauthorized content. In a more connected world, users would be able to transfer their content to any of their devices, and even access it from guest devices. DRM as a concept actually opens up a lot of interesting doors (like the Sony demo where an individual begins watching in his living room, moves to the kitchen and picks up at the same moment, takes it with him on an iPod-like thing, and accesses his home content from the train). The technology for the good parts of DRM isn't all the way here yet, and its implementation as a lockout has completely soured its reputation.