One year ago today, a fresh Fool made his dueling debut, defending the virtue of DVDs-by-mail pioneer Netflix (NASDAQ:NFLX) against all-comers. That Fool was me, and the challenger that fateful day was deep-value expert Chuck Saletta. Plenty of water has passed under the bridge since then, so let's recap the battle and then take a longer view of the issues.

Let's get this party started
I ran a compare-and-contrast exercise, pitting Netflix against archrival Blockbuster (NYSE:BBI) both in its physical store format and as an online service in its own right. Netflix came out on top in every category -- sharp focus, customer satisfaction, first-mover advantage, intellectual-property protections, and library size.

It seemed a foregone conclusion back then that Netflix would simply outperform its competitor. After all, it was "running Blockbuster and Movie Gallery (Nasdaq: MOVI) out of business," I said. "It has scared away (Nasdaq: AMZN) from getting into the movie-rental business. And it has beaten Wal-Mart (NYSE: WMT) to the point of handing over its own movie rental customers on a silver platter. What more can Netflix do to prove its mettle?"

Return fire
Chuck liked my history lesson, but he pointed out its backward-looking focus. He thought that Netflix was facing serious challenges from cheap Wal-Mart DVD racks on the one hand, and from video-on-demand services from cable operators on the other.

In summary, Chuck said that "Netflix has a great past, but its future is on shakier ground. As we teach at Motley Fool Inside Value, companies are valued based on their potential future earnings prospects. The past establishes a track record, but it says nothing about what will happen tomorrow. For Netflix to be worth what the market values it at today, it needs to have both a solid strategy and the technology in place to fight the next war, not the last one. Until I see definitive plans in that direction, my money is staying away."

20/20 vision
Then it was up to our readers to pick a winner, and they sided with my bull argument in a predictable landslide -- 73% of 435 voters took my side, versus 18% for Chuck and 9% undecided. That's that, then. Right?

Well, the popular vote is nice, but it does not a president make. (Just ask Al Gore.) A year later, Netflix shares are trading 20% lower than they did back then, while the S&P 500 has gained 22% over the same period. Ouch. In the real world, then, Chuck is the victor.

What happened was that Blockbuster presented its audacious Total Access program, where customers get the best of both worlds -- online and frame-and-drywall rentals -- all at the same price as the online-only rental programs. It's a great value for customers, and Netflix's subscriber growth was stopped dead in its tracks.

We can argue all day about the economic value of Total Access to Blockbuster itself, and in fact, two other Fools re-dueled on that premise two weeks ago. Fellow Foolette Alyce Lomax pulled out another bullish win against Rick Munarriz, as readers today seem to agree with the untenable financial position Blockbuster is putting itself in as it goes after bucketloads of online subscribers.

We'll see how that works out in time, and I plan to give you a report in 50 weeks or so. For now, I'll annex Alyce's victory to this battle, to break the votes-to-performance tie we had. Selfish? Maybe. But at recent prices, maybe even Chuck would think Netflix a great value today. Basta ya!

Foolish finale
On a personal note, I'm a Netflix shareholder and lost some money on that downward slide of the share price since that duel. The market seems really worried that Total Access will wipe out any advantage Netflix might have had and force the company to lower its prices or improve the value of its service just to keep up with the Joneses.

But I think that's a shortsighted approach. The simple fact is that Blockbuster can't afford to bleed cash through its admittedly innovative customer attractor for much longer -- the company is in heavy debt, closing more stores than it is opening, and bleeding cash at every turn. Giving subscribers twice the movies for the price is great for the end user, but not so much for the company.

Netflix management knows this, too, and doesn't seem too worried. In the latest earnings call, CEO Reed Hastings said as much and explained that the stalled subscriber growth will restart when, not if, Blockbuster is forced to raise its prices or lose the free in-store rentals.

That didn't sit well with Blockbuster activist investor Carl Icahn, who bristled at that comment in the company's recent annual shareholder meeting. "I should give a report on how Netflix is doing," he said. "I'd like to know what the [Niflheim] they're doing over there and how they'll compete with our stores."

Justified anger or bravado and braggadocio? I'm leaning toward the latter explanation. Blockbuster is getting desperate, but it can't afford to show any weakness. Sorry, guys, but it's not working.

Further Foolishness:

Netflix and Amazon are both active Motley Fool Stock Advisor recommendations, and Wal-Mart is a Motley Fool Inside Value pick. Free 30-day trial passes are just a couple of clicks away!

Fool contributor Anders Bylund is a Netflix shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will go ahead and make your day, punk, whether you feel lucky or not.