It depends a lot on the show and how it's written, and on who's watching (a good portion of viewers/readers just don't enjoy the long series - they spend most of their time not enjoying the storytelling as it goes on but wanting to get to the end or complaining that "nothing happens".). I tend to agree Dexter is one of those more interesting on DVD. Same for Fringe, True Blood and most of the HBO series that aren't much written as "classic TV" and far more like movies.

For sure watching a whole show at once, one that is developped through a season like a novel, provides you with a far more cohesive perspective on the story and character development (and often thus more enjoyable an experience), and diminish massively the irritation of slower developping storylines or characters when watched on weekly basis (for those who feel irritated anyway).

And even greater advantage, IMO, is gained by watching the episodes without constant interruptions by commercial breaks (one of the big woes of TV, especially north American network TV (it's not as bad everywhere). It constrains TV writers massively to a weird format divided like acts when the story to be told don't necessarily benefit from this structure, stretching or rushing the storytelling to fit the space between the breaks, complete with tons of artificial ends of act). Tv shows that are broadcast without advertising flows much better, and follow a better and more natural dramatic structure, bothered only by the end of an episode.

As a viewer, not only you save about a third of the time you need to devote to watching the show if you wait to watch it continuously, but your attention remains focussed on the developping story, not distracted by other stuff regularly (I don't watch much network TV live anymore, especially not American with the insane amount of advertising, it feels to me much like trying to read a book with stopping every few pages to do a 10 min of chores). Secondary scenes where "not much happens" are often enjoyable without breaks, but they can get very irritating when then it stops for 2-3-4 minutes of advertising and you see the clock running and that the episode won't get back to the storylines you prefer until next week. You also had to "suffer" through the breaks to get there, so you're much harder to satisfy, far more impatient with those bits necessary for good storytelling, but that don't necessarily give you instant satisfaction between two commercial breaks (and when they started producing shows without self-enclosed episodes, the TV networks have very much developped a storytelling style based on instant gratification of the viewers. With shows that try to work differently (less fast-food storytelling, more complex or layered), it's often very hard to satisfy the viewers once the novelties wore off (Heroes and even Lost experienced some of that). Probably the majority of viewers (enough of them anyway) got addicted to the instant-gratification and don't enjoy a story that takes its time to build up anymore. Even with shows that have endured good popularity (eg: Lost), lots of viewers have developped insane expectations about the "pay off", and keenly forgot all the pleasure they had over the years with the show if the finale or finale season disappoints them (some friend of mine who's had hundreds of hours of huge fun watching Lost but hated the finale was advising other friends not to watch the show at all.. I found that totally absurd to make it all not about the hundreds of hours of episodes but only about the last few, or the few quite bad ones along the way...)

That said, and though I agree TV writing (especially on cable) is evolving with the fact most viewers don't watch it live anymore (especially if you factor in the foreign markets), getting closer and closer to cinema writing, with more subtle and complex storylines, it's not true of all shows. TV writers still craft their stories to be watched primarly live. By watching them on DVD you enjoy more the subtleties (eg: of secondary storylines being built up to something distant that you couldn't necessarily see that it was going anywhere when watching weekly), but you also see much more the limitations of the format/medium (anything from the built ups to breaks that aren't there anymore to aborted storylines and changes of mind when the ratings plummet - that last was especially painful when watching Heroes on DVD and even the sometimes simplistic storylines/mysteries that worked for a weekly show but that is all too transparent when watched from start to end over a short period of time). Watching on DVD you also lose a "social" dimension of some shows. Series like Lost (and before it Alias, for e.g., and the show that in some ways started the trend, Twin Peaks) were written largely with cafeteria/coffee breaks/internet forums conversations in mind, concerned with giving you something to chew on for the week and discuss. This aspect of the show can get repetitive/annoying when watched on DVD, though other aspects of the show were much better (or less annoying) watched that way.

Personally, I see some of the cons, but tend to watch little TV live anymore (unless it's series like Modern Family with self contained episodes, but even then I prefer sitting for 22 min rather than 35). I can put up better with the shortcomings of the format (like the writing around the commercial breaks etc.) than I can bear with my annoyance at losing precious time watching advertising, or getting annoyed at the interruptions. Recording the shows first used to solve that part, but there's the rest of the pros of watching full seasons in one go to factor in as well. It used to be annoying a bit to wait a full year before a new season, but not anymore. Nowadays there's more than enough good shows from all around the world available as DVD/BR (I don't buy that many, I rent a lot or what I like even better: in my social circle we don't buy the same shows, we each buy a few and loan them to each other instead) or online to fulfill my weekly needs for a TV fix. I watch a lot more shows than I used to, but I spend less hours in front of the TV than before (and I do that less often in a week - about an evening or so, a bit more when the weather really sucks). I read a lot more books (and have time for other evening activities) since I watch TV mostly on DVD and such.

As for this "killing" cable ultimately I don't think so. Their sources of revenues have diversified, and revenues from people paying to get the channel are important, but not as vital as before. Their shows are seen and paid by a lot more people than they used to be. The game has changed for sure. Really bad reviews can count for more than before (in the few cases when they don't come alongside bad ratings), but excellent reviews and so-so weekly ratings can occasionally save a show or get it a reprieve(as they are promising for the DVD revenues, including foreign ones as nowadays the hype or bad reviews a show gets in its home market is known abroad). Getting a show off the air to cut down the losses has more long term repercussions than before, as it has a big impact of DVD revenues, and more and more the production values of shows has taken the worlwide DVD/Netflix etc. revenues into account.