The core problem Blu-Ray faces is there isn't much interest in it outside of people who would have bought a PS3 anyways ...
Now, this could be because it is still a new format after all it typically takes several years for people to know/care about the benefits of a new format; it took almost a decade for CD to become popular and it took 4 to 5 years for DVD to really catch on. On top of that I think a lot of people's expectations for Blu-Ray were/are set too high because of its association with the Playstation, in fact there were analysts who claimed that (when the PS3 was going to launch first half of 2006) there would be 40 Million PS3/Blu-Ray players in people's homes by the end of 2007. This is made worse (in part) because some movies perform really well (The Dark Knight) because the target demographic of the movie lines-up really well with the userbase of the PS3; when a few big movies get 20% to 25% of their initial sales from Blu-Ray it gets people to expect that soon most movies will see sales in that range, and when movies with a drastically different target demographic see under 5% of their sales on Blu-Ray it looks far worse.
