I am an ardent fan of BD and I always buy my movies in BD, if available. Just finished watching 16 hours(! Never thought I'll become vegetative to this extent!) of the BBC series "The Tudors" on my 70" Sony. This is the way all TV should be. Superb cinematography, superb sound, good script even if historically inaccurate. But Sigh... Most of the people I would happily let borrow my discs still do not own any way of playing BDs. They all own (with mis-adjusted aspect ratios) HD displays, but the highest resolution they have ever watched at home are pirated download movies and DVDs. They are generally early adopters and all seem to have terabyte drives full of pirated movies. These pirated downloads are surprisingly good for not much more than a GB per hour (slightly better quality than the HD LLVJ but still very far from a BD movie). But I think there have been too many hurdles imposed on BD, primarily by Sony and other studio owners like Warner Bros. After brilliantly making the PS3 the early-adopter BD player of choice, they still insist on Region Coding, 20 to 30% premium for a BD version of a movie over a DVD, ridiculous price for blanks, still too high a price for burners, etc, etc. Yes, pity, but I think it may indeed be dying.
As I see it, if Blu-ray is dying then it is likely to be true only within the context of optical media in general, dying. I cannot see a situation where Blu-ray would die and standard defition DVD would continue. If optical media is superceded by cheaper, sold state and/or 'race track' hard drive storage (whatever), in conjunction with increased internet speeds, then possibly all optical media will become obsolete.
However, there are large areas of the globe where fast and affordable broadband internet is not available. Even in Australia, 25GB of internet downloads currently can cost a lot more than a 25GB Blu-ray movie, without even including the cost of the storage of that download.
If we go back in time to the introduction of the music CD, and then the DVD , I think probably 2 1/2 years after the introduction of those media formats, prices were then far greater than they currently are for Blu-ray, whether blanks or recorded data, if one takes inflation into consideration. In fact, I recall paying as much as A$25 for a single music CD in the early 1980's, which by today's value would be at least A$100.
Nor do I believe that 2 1/2 years after the introduction of the DVD, I would have been able to buy a multi-region DVD player for even close to A$250. I can get such a Blu-ray player in Australia today, albeit made in China, multi-region for both Blu-ray and DVD movies.
50" Plasma displays, Blu-ray players and Blu-ray movies are all tremendously good value. The recession will of course have an impact, as it will in most areas, but entertainment seems to be relatively immune to recession. People need to be entertained .