It'll mean there's one fewer, prominent option to watch movies and TV on Daydream, though there's still support for the likes of Netflix, Hulu, Plex and, of course, YouTube. The shift from Play Movies & TV to YouTube VR might cause some annoyance, as you can't rent or buy directly through the latter app, and there's no dedicated section there for your purchases.
The shutdown reflects a couple of trends in Google strategy. For one thing, it seems to be winding down entertainment options under the Google Play branding. Google Play Music is going away, with subscribers being moved to YouTube Music. Google is also shifting its focus away from VR to augmented reality, having closed down its Spotlight Stories VR studio and announced the end of the Jump VR platform in recent months.