

True, it’s always a combination of resolution and bitrate, though I personally haven’t had the kind of artifacting you are describing. However I also never stream movies etc below 1080p, so I can’t judge how bad the encoding at 480p is on Disney+. In any case, provided the bitrate / encoding is sufficient, you can never reach the level of visual fidelity of higher resolutions with DVDs.
And how would you get stuff onto your homeserver legally?
Buy and rip Blu-rays, in some rare cases you can actually download DRM-free content, depending on your jurisdiction you may also be able to remove DRM protection legally.
I think this situation is not so black and white. Before we had the current gazillion streaming services and Netflix had almost all content, most would-be pirates weren’t even thinking about piracy since the service was good enough. In the current situation with atrocious monthly fees and content being split across 10+ streaming services, there probably are quite a few who legally stream what they can get with their subscriptions and pirate the rest.