hairfill says;
"Seems odd that they wouldn't code the app to buffer in this day and age."
While this is only conjecture on my part, I think this relates to the business model each company has, and Netflix's arrangements with component suppliers (like Apple) who provide their service.
Apple charges for rentals of movies, TV shows, etc., through iTunes when you watch them on an Apple TV. When you do pay your $1.99 - $5.99 (whatever) to rent, you have that show for 24 hours to watch again. It can just stay there in your ATV's memory.
On the other hand, with Netflix, all of the money goes to Netflix, and they may not allow ATV's (or other devices) to hold a buffer on their memories (if any) either. They may just insist that straight non-buffered streaming is all they will allow with their business arrangements. That's all I can get with my Oppo BluRay player, for instance. Recently I was unable to get Netflix on my ATV3 for a few days unless I downgraded it to 720p from 1080p video. A call to Netflix service confirmed there was a problem with ATV3's "which will be fixed soon." A few days later it automatically fixed itself, with no need for a software update from Apple.
I still think the main problem is your internet supply speed or wireless connection. Have you taken an iPad or iPhone to the site where your bad-performing sits in your house, and then run the free SpeedTest app to see how you do? If you dont have at least 6Mbps internet speed there you have found the problem. Although, you could also be receiving periodic interference from neighbors or your wireless phones, etc (iStumbler will help you find that).
I'm not here to toot the horn for Apple, but just relating my experiences. Hope it helps, and you get this fixed soon.