The average consumer on the other hand really can't see that big of a difference at that viewing level.
Which is a weird statement, since the size of the screen has not much to do with the question if you can see a difference between BluRay or DVD.
Screensize / distance or viewing angle is the only relevant factor here. In other words the smaller your screen, the nearer you have to sit to it to see the difference. In many cases people cannot change the living room but if you can sit directly before it you can get cinematic feeling with a 32" TV, and up close EVERYBODY can see the difference although people will notice it less in some movies and more in others (Nature, animations, ... ) Besides 720p has advantages even at modest viewing angles. 1080p may be a bit overkill unless you have a huge television or sit very near to it. (there was a chart once)
Is it worth it? Depends on the price of the discs and the movie type. I would kill for a Lord of the Rings BluRay edition. But I wouldn't pay 30E for anything else.