The reason for the endurance of theatrical movies along side the home video industry is that film-going is a social experience. It's the 20th century secular version of church. We share our culture corporately at the theatre. It gives us a common language and reference. We feel we must see the same movies everyone else has seen in order to share the culture. Film is the premiere art form of the 20th century.
I like the idea of a canon of must-see films that doesn't change (especially for the 20th century), if only to teach each generation to appreciate the progress, if any, that film has undergone, and to give them a common film language. To exclude from the canon those films which our predecessors found significant is ignorant and short-sighted. We must understand the historical context in which films were created. We need to know what the standards are in order to grasp when they've been exceeded. There's nothing new under the sun, except what's been forgotten.
I would encourage you to check out the classic films of the past, the AFI top 100, or the Academy Award winners or nominees. It will give you a feel for what our previous generations were thinking and experiencing. The 20th century was the most documented period in all history. Through film, we can experience history with amazing immediacy.