The way you're probably thinking of doing it (putting DVD in drive, sharing drive on network, pointing DVD playing software on different machine to said network share, hitting play) no. There are other methods, from the 'illegal depending on who you ask' to the 'gee it's like watching a quicktime.'
If you have a fast enough lan, why wouldn't it work? I tried it, installed a software DVD player on a PC and networked the DVD-ROM from the other computer. The only problem was jerky playback because we're on a 10Base-T lan.
Besides the encryption, its also a question of bandwidth. You might be able to get semi decent playback over 100BaseT if the only thing the LAN was doing at the time was DVD playback, and your net cards could get the full 10Mbps stream out to the network.
And it has to be perfect, no dropped bits/frames. Otherwise the jerkiness will be unbearable.