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There seems to have been several superior formats springing up amidst the Blu-ray/HD-DVD battle, but they all suffer from a primary problem:

No studio support.
Not many high-profile studios are willing to just drop their Blu-ray or HD-DVD lines just to start anew with this HD-VMD.
It would be a hell of a lot of money wasted with BD/HD-DVD, and I don't see many companies willing do that, especially with the interactive and privacy features that both Blu-ray and HD-DVD hold over this format (Although I could be wrong about the interactivity available with this VMD).