Can Chromebooks Play Video DVDs?
No. Chrome OS does not currently have support for playback of video DVDs included by default.
However, it’s now possible to play DVD video with the help of VLC for Chrome OS. Also, VLC for Chrome OS and VLC via the Play Store no longer seem to allow accessing DVD drives.
While it is possible to connect an external USB DVD drive to a Chromebook, you can not currently watch DVD movies by default in Chrome OS. Unlike simple movie file formats that you might find online, playback of DVD Video requires special decoding software and codecs to work. Google has not licensed this software and included it with Chrome OS,
however, VLC for Chrome OS provides limited DVD video playback for Chromebooks and Chromeboxes (details here). Considering that no Chrome OS devices ship with DVD hardware, it is unlikely that Google will license DVD Video software and include it in Chrome OS.
Of course, it also would be possible to watch video DVD movies using crouton along with software like VLC, but this requires switching your Chromebook into developer mode and installing a secondary operating system, something that is not recommended for everyday Chromebook users.