Physical media is a dying format. Over 50% of my DVD library has been ripped and saved to my Windows Home Server (it would be more, but I've been very lazy about it). And any movie stored on my server can be streamed to several electronic devices in the house. Almost all of our viewing is streaming from the server, or streaming from Netflix. Sometimes the kids will want to watch a DVD I haven't bothered to rip yet, or we'll sometimes watch the physical disc we get from Netflix. That's it.
I certainly see the appeal of Blu-ray. Better picture, better sound, etc. Hell, I've still got a few HD-DVD's sitting around. Also because I've been lazy about finding the ripping software and taking the time to rip them to the server. But if I did get a blu-ray device, it would probably be a BR drive for my PC. Again, so that I could rip the movie to the server. I don't care about all the extras. I just want the movie.
And not having to deal with physical media is a big deal. Don't have to worry about scratching or breaking the disc. Don't have to sit thru all the previews and FBI warning screens. Just navigate to the movie I want to watch, and click play. It's instant. And the fact that any laptop, PC, xbox, Sage extender, iPhone, or iPad (if I ever get one) in the house can watch any movie file that's available on the server is pretty awesome. I can even connect to the server from a remote location, and stream my files there, too, although there is some loss in quality. That's still a pretty cool feature.
Why would I want to deal with all the hassles of physical media? I'm pretty sure this pic sums it up.