In the age of the YouTube videos, Video and Audio quality is not as valued as it once was. People are now used to watching low quality (video quality and content quality) video online and downloaded movies that are of lesser quality than DVD. The fact that people don’t care about quality is not the only reason why Blue-ray is not doing so well, I believe that it comes down to convenience.
All the big shifts in distributed audio and video happened because of the arrival of a more convenient alternative. Lets start with audio, vinyl was replaced by cassette tapes, not because they had more features or better quality (which they didn’t have), but because you could easily carry them with you. Then onto the CD, sure the quality improved but they were even easier to carry around. Now that we’re in the MP3 age, it is now easier than ever to carry 30 albums with you wherever you go.
Video follows a very similar story, the reason we moved from VHS to DVDs is not because of features like not having to rewind it before you return it to the Rental store, if it were the case then why didn’t the Video Disk make it? Video Disks didn’t survive because they were HUGE!. DVDs, just like CDs are much smaller and easier to handle than tapes. Now here comes Blue-ray. To most people, Blue-ray can’t be any better than a DVD since it physically looks just like a DVD and that is the reason why Blue-ray is having a hard time. Sure 1080p looks amazing, but it’s just a feature and people don’t care that much about features, they want “easy”. Now, since audio went the digital MP3 route, it’s almost a given that video will be going that route to.
And I believe that is why Blue-ray will not make it. I still have my PS3 and I might go rent some Blue-ray movies once in a while, but I don’t think I’ll buy any Blue-ray movies, because I know that the future of video will be online downloads, just like music. Now if only we had good online video store options in Canada, but that’s a different story.

And to think I was starting to consider buying myself a Blu-Ray Player! HAH! Seriously though, you’ve got a good point. I also don’t care about most of the features on DVDs anyways (besides, how many features can you add on there before it’s too much?)…
Maybe I’ll invest that money in a PVR instead, or you know, my debts… (meh)