I don't think there was ever any doubt that digital distribution would take over in the long term. The question was always just how long it would be before a predominantly digital world came to pass, and whether there would be time for a new optical format to thrive in the interim.
I think Blu-ray's current and continued success has shown that there was (and still is) room for another optical format after DVD.
I notice you mentioned Netflix's growing success, and I must say that I subscribe to Netflix's streaming only service, and I absolutely love it. However, for my favorite films and shows, Blu-ray is still my preferred viewing method. I don't have the bandwidth to support HD streaming, and what HD streaming I've seen pales in comparison to Blu-ray, in both video and (especially) audio. You can't beat Blu-ray at the moment.
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