Netflix is one of those American services that people in other countries are intensely jealous of if they can't get it. And with such a wide variety of TV shows (and at least a few dozen movies, too) for a few bucks a month, who could blame them? But now that Netlfix has expanded to literally hundreds of new countries and territories, there's no need to look longingly at the US anymore... or to use any of the elaborate web proxy workarounds to get access to the service outside of supported areas.
Now that Netflix has made its big international push, they're working on cutting down on that proxy use. The company's VP of Content Delivery Architecture David Fullagar said as much on an official blog post, noting that Netflix is certainly aware of the use of proxies to circumvent its geographical restrictions. The post said that Netflix will begin proxy detection to cut down on users accessing the service from non-supported countries, or at this point, using it to access shows and movies that aren't available in a particular location.
That second point is the largest problem going forward. International media licensing is such a headache, with different companies often owning the rights for individual shows and movies in each country, that negotiating to put them on the service is one of Netflix's biggest jobs. (Incidentally, that's also the reason that Google can't give away all those free music albums outside the US most of the time.) And it's hard to blame Canadians for using a workaround to get that one show that they can't watch in Canada by spoofing a US IP address. Even so, Netflix has legal and contractual obligations to uphold, all the more now that it's active in so many different countries.
The blog post shows that Netflix is aware of the frustrating problem of different libraries in different locations, and they're working on it. That being said, with so many streaming competitors popping up, the idea of a complete (or even near-complete) Netflix library for anything except the shows it finances itself is something of a pipedream.