I think this has more to do with being ambiteous. Some of the developers advocating the benefits of Blu-Ray's additional storage already use the Cell to decompress data, a task the SPEs are very powerful for. Developers will try to seek an ideal balance for their game regarding decompression time vs decreasing loading times.

Multi-platform developers have complained to Microsoft for their usage of DVD instead of offering technology allowing more storage.

I haven't heard of developers who were upset with Microsoft over their choice of DVD as their format ...

I have heard of developers who were upset with Sony for including Blu-Ray because it produced a $600 system

Blue Dragon for the 360 is to use 3 DVD's. Is it not? Reported Here

Then again that is not the only game that has used more than 1 disc (including other systems -like FFVII and FFVIII on the PS2). I think Blue Ray could be the way forward for all those flashy videos in game, but really I wouldn't want it to move away from gameplay just to fill the disc.

Same here, I haven't heard of any 3rd party developers having issues with MS staying with DVD, the only time I hear about people having issues with it is with people who work for Sony (Naughty Dog and SCEA).

@ HappySquirrel

Maybe such stories were under reported by the media.

"According to Game Informer, nearly every developer they talked to at X05 expressed difficulties fitting their launch titles onto a single disc." 

Some food for thought: 

Insomniac: 

"If you ever hear someone say “Blu-Ray isn’t needed for this generation,” rest assured they don’t make games for a living. At Insomniac, we were filling up DVDs on the PS2, as were most of the developers in the industry. We compressed the level data, we compressed the mpeg movies, we compressed the audio, and it was still a struggle to get it to fit in 6 gigs. Now we’ve got 16 times as much system RAM, so the level data is 16 times bigger. And the average disc space of games only gets bigger over a console’s lifespan. As games get bigger, more advanced and more complex, they necessarily take up more space. If developers were filling up DVDs last generation, there are clearly going to be some sacrifices made to fit current generation games in the same amount of space"

PS3 vs PS2, just imagine 480p vs 1080p games, better audio, larger more complex games, etc. Really I think the long term advantage of more disc storage is pretty obvious.

Ya like I should trust a company who is part of Sony to tell me DVDs are to small. Of course Insomniac is going to say DVDs are to small they are owned by Sony and they need to make people beleve its needed. These are the same guys who padded Resistance: Fall of Man to make it look like it needed a Blu-Ray disc.

Saying that DVDs are to small based on the PS2 is a really bad example. The PS2 required textures and video to be fairly uncompressed since the PS2 did not have the power required. If you look at the file size of any PS2 multi-console game and compare it to the Xbox or even GameCube counter part the PS2 version is almost always double the size.

A good example is GTA: San Andreas on the PS2 it clocked in at about 4.19GB while the Xbox version (which has better sound and graphics) clocked in at 2.28GB.

I'm not saying larger disc space won't be needed eventually, I'm just saying it won't be needed till Next generation. 

@ CapAmerica

Some more food for thought:

Kojima Productions:

"GP: We recently spoke with Sony's Phil Harrison, who told us that he thinks PS3 games will soon use 50 GB. Do you agree with that prediction?

Kojima: Yes, I do. It's high-def, and just to make it high-def, the data requirements are huge.

Back in the days when I was working on 8-bit, 1 MB ROMs came out and I thought, "wow, great!" But it wasn't enough. When the CD-ROM came out, we thought we had so much space. But when we started to add sound, there was a lack of storage already. Even Blu-ray, I don't even feel that it expanded data so much. With cinematic, the space fills up right away. You may hear Blu-ray is huge, gigantic, 20 GB or so, but that's not really that big to us. One basic [gameplay] frame with HD and 5.1 takes up so much space that the capacity will become too small in no time. If we maintain the same level of graphics and sound as the PS2, then Blu-ray is spacious. But that's not the case.

Evolution Studios regarding Motorstorm:

" When asked how much space the game takes up on a Blu-Ray Disc, the developer replied: "We use most of it, about 18GB if I remember correctly (and everything on the disk is actualy compressed at a 2:1 ratio too as the CELL is so powerful, that it can decompress the data faster than it can read it." The team also reiterated how working on the PS2's World Rally Championship gave the team the "pedigree in racing games" and noted that with each release, the graphics and gameplay bumped up another level. We can expect the same with future games from Evolution Studios on the PS3."

Another interview:

"We also use most of the Blu-Ray disk (thank god its not a DVD!). We are confident however that we can still sqeeze a great deal more out of the PS3 and as we found by making World Rally Championship for PS2 every yeat for 5 years, doubling the visual through put is not unusual on EVERY ITTERATION!) - yes, it even amazes us!"

Phase5 regarding Lair:

"IGN: What advantage does Blu-ray afford you now? Everyone talks about how great the extra storage space is but are you actually using it for Lair?

Eggebrecht: The single level at TGS alone takes up 4 Gigabytes of data. We are using every ounce of that due to streaming of our textures. Sure you could chop them all down to tiny sizes and we would fit, but then again, it would not be the same game. In addition to all the textures and geometry, we also do have video on the disc, and all of that is in native 1080p resolution. Thanks to Blu-Ray we don't need to worry about that and can still fit the whole game on a single disk."

 Yes and you also have to remember what was one of the main driving force between developers exodus from the N64.

What advantages cd had over cartridge no onw knew at the time but the devs were convinced they could use it. And if anyone remembers the launch games from the PS1 they were far from impressive and did not outshine the competition.

 This is why when I hear develepors grumbling (like the enchant arms developer) and they say they would like to use more space I feel that the time for advancement has come. It seems with the introduction of the internet, there are plenty of brilliant and experienced AAA game devs that claim that DVD9 is big enough and they do not "need" any bigger.  I mean I assume they do this for a living right?.... why would they say otherwise?

Give me a comment from someone like EA, Ubisoft, Capcom, Rockstar, or even Square.

 I will not trust anything coming from Sony or a "3rd Party" company who only makes Sony games.

Of cource they are going to say Blu-Ray is needed, it they don't it makes them look stupid. Sony is going to do everything they can to make other developers and the industry think they need Blu-Ray when in fact we don't right now.

Even Phase5 tiptoed around the idea that Lair could go on a DVD. Do we really need 1080p HD video? and I bet that the textures would look just as good scaled down as they do in the current state. They won't say that cause then certen people would get pissed off at them cause they are trying to make something that will be used to prove to the world that Blu-Ray is needed. IF they were to say yes it can go on a DVD and look just as good then it makes them look dumb.

Phase5 They set out to make a game that would need a Blu-Ray disc. And hell we don't even know how good Lair will be it could turn out to be a pretty bad game when all they did was focus on trying to make it as big as they could get it.