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I think you're better off continuing the VOD approach if all you have are processed MPEG-4's and their AAC audio, and not the raw masters. It would make for a low quality product since they would have to re-encode the MPEG-4's to MPEG-2's and AC-3 audio, and you would be losing out on both the video, and the audio, and the consumers simply wouldn't be happy, even if your MPEG-4's are 720p+, you still have to re-encode them down to DVD specifications (720x480 anamorphic for NTSC) and since it's a very old and lossy codec, you won't get a hell of a lot quality like you can get with H.264 (or x264) and H.265 (or x265) nowadays unless you really crank up the bitrate, which usually isn't an option. Since you would have to go from a single-layer DVD, to a dual-layer DVD if you wanted each scene to have enough bitrate.
Too long, didn't read: Don't do it if you haven't kept the RAW materials. VOD can make just as much, if not more nowadays. Especially if you contact Japanese VOD sites to carry your titles.
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