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There are other ways of dealing with the problem. We did a version of Ar Tonelico that was hardsubbed, but had a second subtitle file with all the notes relating to the game. That way you didn't have to see the notes if you didn't want to (for those like WanderingKnight) and anyone who wanted to could. It was just another method of dealing with the same problem. There have also been a number of groups that added notes to the beginning or end of an episode or put out PDFs with the episodes, i.e. Black Sheep's Mononoke.
And back to something vaguely on topic...
Fansubbing is still popular because a lot of people don't like how the DVD companies release anime. Personally, I get tired really quickly of mentally fixing grammar (adding in or taking out commas, changing the order of clauses, switching hyphens to em dashes, you know what I mean), and it seems I have to do it all the time when watching DVDs. Then there are the limitations of the DVD format itself. We're pretty spoiled with the .assa format that most of us use for fansubs. We get our karaokes (for those who actually care), fancy typesetting and fancy timing. We also get to do things our own way. And like any true geeks, we know, deep down in our hearts, that we could do better.
Translation: almost purely mastabatory hobby as you so kindly put it.
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