In video game emulation, if you own a physical copy (or paid game download in some cases) of a game and you made the ROM of it yourself, that’s totally legal. In my book, same goes with movies. I don’t share my collection with anyone outside of my immediate family, I don’t profit in any way from owning the digital copies (although you could say I’ve “profited” from having the convenience of a Plex server, even though that Plex server cost me somewhere around $5-600), and every single DVD/Blu-Ray rip I have in my server is one I made myself. On top of that, it’s not like the movie companies are losing money due to my server, since all my DVDs and Blu-Rays are legal copies that I paid for. (Technically, most of my collection I bought from used video stores, but still.)
As for encryption, I refer again to the video game ROMs law. Most if not all new games are encrypted in some way, and although most early disc-based games (such as PlayStation 2 or original Xbox) are as easy to rip as putting them into your nearest generic ISO maker, all cartridge-based games are also “encrypted” in a sense that they use proprietary hardware that would be impossible to make a ROM of without the use of special tools such as cartridge adapters for computers or, in the case of newer cartridge-based systems such as the Nintendo Switch and 3DS, special home-brew software that runs on the system itself.
The way I see it, me owning a server like this is totally legal.