Blu-ray would never, ever be as Big as DVD was/is. It's just impossible - there's more options available to users today than there was when VHS and later DVD were launched.
I don't think anybody in the business expected Blu-ray to end up with - say - over 60% of the DVD market at its peak. If they did, they were being incredibly bullish.
But it doesn't mean Blu-ray is failing if it doesn't achieve DVD levels of sales. Has the PS3 "failed" because it's not reached the heights of the PS2 sales, and hasn't even come close to the remarkable market share the PS2 uses to enjoy?
Are today's popular music acts failing because they don't sell as many singles/albums as they did 10 years ago?
And while movies may seem to constantly rake in record box-office these days, evidence is more people viewed movies a decade ago on average than they do now. (More people went to see the The Phantom Menace or The Lion King than Avatar for example).
http://mrob.com/pub/film-video/topadj.html
No. Because in all entertainment choices, people have more options. When people have more options, people fragment their choices.
Regardless of the fact that people are happy with DVD (and fair play to them if they are) Blu-ray is needed, and is not a useless upgrade designed simply to "con" people out of their money and "force" them to rebuy films again (and even if it was - how many people on the Fantasia thread seem willing to rebuy those movies again on DVD, despite the newer release being considerably lacklustre - you don't need Blu-ray to entice people to double-dip). No Blu-ray is required because we can view HD content on our televisions, so its only logical we should be able to purchase and own HD content
if we desire to. DVD does not offer customers that option. And it would be ludicrous if the only option for purchasing and keeping a movie or TV series was in an inferior format how it could be viewed on "free to air" television.