Obviously. It's ignorant to think that everyone is as computer-literate as you are. Ask the average person on the street if they've downloaded any good torrents lately, and they'll likely just stare at you quizzically. Netflix has shipping time, and not everyone rents movies often enough to justify paying that much per month.
So yes, lots of people still go to video stores. They aren't doing quite as well as they were 10 years ago, but they're not going anywhere anytime soon.