I have a PS3 and I love the blu ray format, but the reality is that to most people blu ray is only an incremental upgrade to DVD and it doesnt offer anything new.
The only thing that we call all hope for is that blu ray establishes enough of a market to be viable, IMO it will never take over from DVD. The comparisons to DVD VS VHS are irrelvant because blu ray brings nothing new to the table besides HD picture and sound which are better than upscaling, but not dramatically better. Besides that to most consumers blu ray isnt an essential purchase whereas DVD offered so much more and revolutioned the home video market.