Though my personal example doesn't have anything to do with a cable show. For me, the show that demonstrated this concept to me was 24.

I didn't watch the show when it first came on television. I watched the first three seasons by renting the DVD sets and going through the episodes in large chunks, at least 6 episodes at a time (24 seasons were often divided into four distinct and connected six-episode arcs). I really enjoyed the show this way, and completely skimmed past any problems it had, carried on by the momentum of the "real-time" gimmick and the exciting main story with Jack Bauer.

After those first three DVD sets, I was caught up with the show and could start watching it as it aired on television. I started the fourth season, excited. Then was completely disappointed as, week by week, the problems stood out and I could find no sense of momentum. I figured maybe it was just a crappy season, but then season five was the same way, and I gave up halfway through.

I tried watching season six the same way and again gave up. I skipped season seven altogether, and just read some summaries of it. But then I wondered if perhaps it was the DVD box-set format that had made me love the show in the first place, that covered up the show's flaws, hiding them behind the momentum that you can't get in a weekly format.

So with season eight (the final season), I let it air on tv unwatched, and then got ahold of the episodes and watched them through in large chunks over the course of five or six days. And lo and behold, I enjoyed the show again. It wasn't as good as the first three seasons, and now that I had been exposed to the show's flaws I could spot them more easily even in the DVD set format, but the momentum carried me through in the same way it used to.

All of that is a long way of saying that I agree that a number of television shows, particularly cable shows that tell a distinct season-long story arc, can sometimes be better experienced as a DVD set than in an episodic, weekly format. I don't think this is necessarily true for all shows, but you are focusing on cable shows, and for those I definitely agree.

I watched all of The Shield and The Wire via completed season sets, with all of the episodes at my fingertips, able to run through them in a shorter span of time, and I found them highly enjoyable and excellent. I don't know how that would compare to watching them on tv, however. But I suspect that the way I watched them was superior in terms of experiencing story arcs, character growth, themes, etc.

I've recently been watching Breaking Bad, and this is one where I can make a comparison. I watched everything prior to this current season via completed season sets, and thought it was great. This season I've been watching each episode as it comes out, and I haven't noticed a dip in quality. The story carries a sort of inexorable, slow species of momentum that seems to work just as well in a weekly format as it does in a DVD set format. It probably also helps that it's a hell of a high quality show. I don't mind watching it week by week. But I believe a DVD set viewing would probably be a purer way to see the show.

As to whether or not cable shows of this variety are killing themselves, I'm not sure. Ratings and advertising are the key components that allow shows to exist at all. If enough people decide to wait for a DVD set rather than watch a show on tv, it would almost certainly hurt that show's chances of staying on the air. Fortunately, there seem to be a lot of people who enjoy watching shows as they come out still, week by week, because they don't want to wait for a DVD set for a first viewing. The human need to have the new thing perhaps helps to balance the quality of experience issue. And perhaps some people enjoy having their higher quality DVD set viewing be a re-watch, where they already know what's coming and can look for deeper things and enjoy the experience.

What I wonder is if companies will shift to revenue sharing type models that include advertising within DVD sets. One of the benefits of a DVD set is that you don't have advertising, but if people are going to the DVD sets to watch, then that's where the advertising will follow. That revenue would need to be parcelled out properly, so that the people who financed the show in the first place, and the network/company that aired the show in the first place, gets enough of that pie that it continues to finance the show.