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Of course Blockbuster can't actually "edit" the films it carries. The MPAA doesn't "edit" the films it rates, either. By refusing to carry NC-17 films, however, Blockbuster forces even those few directors who manage to fight through the studio system to deliver an NC-17 film to submit to a(n often eviscerating) "clean" cut of their work. The only other option is to forego representation in the country's largest video-rental chain.
Y Tu Mama Tambien loses the kiss between the boys in the final scene, for example, in order to come in with an R-rated cut that greatly alters the dynamic of the film. David Cronenberg has said that he worked on the 'R' cut of his Crash personally and it simply doesn't make any sense. That cut would never have existed if it weren't for Blockbuster and Walmart (who have a similar policy).
The ratings system, deeply flawed as it is, is in place so that consumers can make their own decisions about content. The additional "family-friendly" filter enforced by Blockbuster and Walmart is both unneccessary and offensive. It also exacerbates the problems with the rating system itself (violence is less "adult" than sex, for example).