I recently found contact info for a Canflix partner/programmer, and have had an email exchange with him. I've updated my Canflix notes with all the details.
Basically, Canflix is explicitly advertising that they stock 20,000 titles (Cinemail only has 13-14000), but when you actually sign up and put them in your queue the vast majority seem to be "On Order". When I was last able to check in late May, the number of actually "Available" (or "Available Soon", which seemed to indicate they were rented out) titles put them below even the smallest of the other companies on my chart results.
As best as I can follow it, the Canflix explanation seems to be that much of their inventory came from former video stores, and that they are only slowly able to add it into their database (so the titles are supposedly not so much "on order" but slowly working their way out of a slush pile). Setting aside the fact that current customers would be getting something drastically less than what they signed up for, my own sense is that you couldn't assemble anything close to 20,000 unique titles no matter how many video stores they bought out. They may indeed have a certain amount of backlist waiting to be entered, but I would take a great deal of convincing that it would contain, for instance, the 180 Criterion titles they list (none of which were available as of late May). They've already weeded out large numbers of obviously bogus entries (wholesaler items, etc), but seem content to stand on the 20,000 number (no matter how implausible it might seem to me). They also refuse to provide the actual selection currently available to customers.
I've invited the Canflix people to stop by here, since my increasingly frustrated attempts to get a straight answer have apparently caused them offence. I'd be interested in what conclusions others would draw about Canflix's inventory situation from the same facts - I don't think I'm being unreasonable. On the contrary - if they actually had what they claimed I would have signed up for a few months.