The Ninth Circuit court of appeals understood correctly what the primary use of Betamax would be, but they believed that personal home recording was not fair use, and was thus copyright infringement. They interpreted the law as only allowing libraries to record TV or radio broadcasts.
The Supreme Court ruling for this case found that time-shifting was fair use, but only by a narrow 5-4 margin. Fair use could have gone in a completely different direction over the last 40 years if just one judge had voted differently on Betamax.
We have to remember that at the time of the decision, there really wasn't any source of things to copy with a Betamax recording device besides commercial broadcast TV and other copyrighted materials.
Camcorders and such devices where you could make your own content were very rare, if available at all.
Camcorders were not, but cameras and portable battery powered tape decks were.
This speaks to first principles. I don't want judges making law - and any good judge doesn't want to make law. Laws are from elected legislatures. Of course this is all wishful thinking.
If a judge had ruled differently in the Betamax case, we'd still have the ability to vote in representatives who'd enact a law that explicitly gave us the right to record for personal use. Judges should only have power to decide what a law means in situations where it's not already clear how or if the law applies.
Isn't "judges making law" a key feature of common law systems? IANAL, obviously, I would know the answer to such a basic question if I were. But this is my understanding, and given that this case is in the US and the US is based on common law, I'm genuinely curious if you're advocating the US change to civil law?
Special interest groups throwing their money at suitable cases of random people to further their interests is not a key feature of common law, it's a very unfortunate side effect.