Filmmaker Kirby Dick fortunately doesn't spend long belaboring how stupid this argument is. If most chains won't exhibit your movie, Wal-Mart won't sell it, and Blockbuster won't rent it, then large segments of American society will never know it existed. Even so, you get the feeling the many filmmakers interviewed in This Film Is Not Yet Rated would accept the system if it were sane, or at least fair. It is not.
So we already knew how bad things were, but the MPAA's amazing lack of integrity will still piss you off if you watch this. What little information the organization gives the public about the members of their ratings board (that they are the parents of children under 17 and serve fixed terms on the board) turns out to be flatly untrue. Longtime MPAA head Jack Valenti is depicted as incapable of speaking sincerely about anything*. And Kirby Dick can do some things that print articles can't, like actually showing the scenes which the MPAA star chamber objects to alongside near-identical scenes from other movies that got lower ratings.
In the end Dick doesn't have much of an argument to make; he puts information in front of the viewer and treats the conclusions as obvious. You might call it preaching to the choir, but I think he's uniquely positioned to justify that as a documentary strategy. The fact that the ratings board is completely dependent on lies and obscurity to maintain their position of power speaks as poorly of them as anything else you could say. If you leave This Film wanting to punch Jack Valenti (which, his advanced age and the potential hypocrisy of doing so notwithstanding, you will), spare a thought for the people who ought to see it but will never hear its name except in ads for other movies.
* And Dick leaves out many unrelated obnoxious things Valenti has famously said, like his statement 24 years ago that the VCR was to his industry "as the Boston Strangler is to the woman home alone" and his like-minded recent comparison of file-sharers to terrorists.