As much as I like the format, the only way BR-D will become the dominant format is if the majority of households have HD displays capable of making the added expense justifiable, or studios begin to taper off support for the DVD format.
That is what ultimately killed VHS. Eventually, there were fewer new releases available on the format than DVD.
High quality downloads on par with BR-D are a very long ways away yet. Consider me sold on the form of distribution only after 50GB downloads are possible in less time than it takes me to watch the video at a comparable price.
I'd be willing to pay a reasonable premium for faster bandwidth speeds if the price of the downloaded media was considerably less than physical media.
However, for any movie I wanted to archive in a collection, a DRM digitally downloaded file is no substitute for physical media.
Digital downloads are only best for rentals, or media files I won't miss if I lose the drive they're stored on or there's a problem with DRM preventing access to the files I've paid for (this has happened to me with iTunes).
Ideally, we wouldn't have to store the media file at all locally. If network speeds were magically upgraded to allow for such massive bandwidth loads, low compression HD video would be available for instant streaming off a remote server instantly 24/7 from any device capable of displaying such a signal.
But realistically speaking: not today, not tomorrow, not next year, or even this decade.
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