If you've got a program that can read encrypted DVDs then it's certainly possible to copy the files and folders just as they are to a flash drive, and most of the DVD player software packages I've seen will play from a disk or flash drive just as easily as from an actual DVD.
There are programs that compress DVD files to save space, but at the expense of video quality. Without compression, a commercial DVD can use up to about 9GB (or a little more) of space. "Flipper" DVDs, if they're dual-layer as well as dual-sided, can use up to about 18GB of space (but these are quite rare).