The black rectangles exist because the video is a different aspect ratio than your monitor. Not all displays have the same ratio, a monitor with a matching ratio will have no black bars on any side. So by nature, closed captioning has to be within the video bounds.
I'm aware of the reason for the black bars. The point is that the captions that are not part of the video stream (I believe on DVDs they are not) can be presented below the video if that space exists and the user desires.
