I had intended to quietly but unwillingly go with the flow, but now that I see that we are losing "chapters" as a cost of progress, I must express my dissapointment. As apparently one of the minority, I'm disappointed in the transition from DVD, and equally disappointed at the loss of chapters, which is how I watch and rewatch the product. Pretty easy to rationalize, but not good for this consumer. Like so many things in this day and age, decisions which are apparently made for financial reasons are "sold" to consumers as progress. This is a good but unfortunate example. Sure I'll continue to purchase it, but from my perspective it will be an inferior product to that which it replaces.
While I haven't attempted to make the transition, I think I can see where you're coming from.
One of the attractions of the LLVJ for me has been to select which chapters (or sections, or whatever) I want to see when.
The chapter selection in the DVD version is decent, and makes it at least fairly easy to make these selections.
As far as I know, this can't be accomodated easily with the MPEG-4 standard without providing different files for download.
If the problem is that it's undesirable to have people download multiple segments separately, may I suggest using a standard archive format, such as ZIP or tar? (Both can be used without attempting to recompress compressed files.)