This article has some good points, and unless sony can REALLY get brd much closer to dvd in price, it's going to be a no win situation...right now, studios are trying to get more profits out of home video market, so sony would have to eat the loss in profitability...it already cost more to product a PS3 game over 360 game based on disc cost...but 2012 is a LONG ways away.
http://www.techradar.com/news/video/hd-dvd/5-reasons-why-blu-ray-could-be-dead-by-2012-464705