What's going on with McDonald's DVD burning kiosk trial?

Much has been written about McDonald's innovative DVD-on-demand kiosk project, most of it positive, which is why I was surprised to find this article at Kiosk Marketplace. According to them,

That vision of [DVD-on-demand kiosk provider] Blaze Net’s future never materialized. McDonald’s ceased the state-side testing in December ‘05 with little explanation.

McDonald’s spokesperson Lisa Howard said Blaze Net received positive feedback from customers but would be put "on the back burner." She reiterated that it was a test market project, like many others that McDonald’s frequently launches and didn’t discount a similar project in the future.

McDonald’s left the exact reasons for Blaze Net’s cancellation up to speculation. Some industry watchers blamed the stoppage on iPod’s widespread popularity and Blaze Net’s inability to download MP3s directly onto one, or to transmit data directly onto another MP3 player or PDA. DTM vice president of marketing Squire Velves said there was no Bluetooth downloading due to security concerns.

Others said a fast food restaurant was the wrong venue for music downloading and photo printing. Jokes about "Would you like fries and a photo print with that?" cropped up on blogs and Web forums.

I doubt that security concerns would have quelled a successful launch unless there was a serious problem with the technological underpinnings that would have made a secure re-work too expensive. Likewise, iPod doesn't yet compete much in the digital space (though iPod video is certainly making people comfortable with downloading and paying for clips, which I would think would help DVD burn kiosks, if anything). So my guess is that the last concern -- venue and placement -- is most likely the correct one.