A couple days ago, Adam Jahnke (a columnist for The Digital Bits) wrote about what is really driving him nuts about Blu-ray, a format he feels like he should love but simply can't. I've recently touched on this during the Let the Right One In subtitle brouhaha, wondering aloud why people should have to acquire new physical software to change something so simple, technologically speaking, as new subtitles. I'd go a step further and say what a number of people already say amongst themselves: how many Blu-ray users have their players connected to the internet in the first place?
Gamers with Playstation 3's certainly, and some home theater enthusiasts might, but isn't the rest of the population only just getting comfortable with the idea of WiFi? As it stands, with looming broadband access caps from at least Time Warner, is BD-Live already dead? There's yet to be a BD-Live killer app, and if it will now cost a premium to have the kind of pipe taken for granted by the format, there may never be.
The real solution that consumers would be behind is some sort of Magic Box. It would allow them to rent and watch movies instantly, record live TV, access various streaming services (Hulu/YouTube/etc.) to catch up on shows, and finally, watch DVD-style supplemental features all in one place. You could always buy physical copies that are higher quality than you could ever download, but as for most sides of the TV-bound media-watching experience, consumers want some serious consolidation, and not for an insane premium.
Frankly, many are already doing a lot of this with home theater-connected computers, but again, the bandwidth caps being put in place are bringing all this proliferation to a screeching halt. The conversation is less about whether physical or download media will win, but whether either will survive very well.
I've run close to off-topic, but here's what I'm getting at: Blu-ray's calling card with BD-Live was that it was supposed to remove the need for hooking a computer up to the TV, and even though it's not living up to that promise (never could), there are no alternatives thanks to limitations being imposed elsewhere. In this era of endless digital possibility, nothing is yet living up. Don't get me started on Blu-ray releases lacking key things in first releases (supplements, lossless video or audio). I love Blu-ray but it drives me nuts almost as often.