The "manufacturing costs" of these disks is approximately zero and consumers know it.
Of course, producing stuff worth buying wouldn't hurt either. :)
Bottom line: blue-ray is too expensive. It doesn’t offer anything additonal the AVERAGE person would care about.
This is like the CD vs. mp3 debate. The audio quality of a CD track is superior to a compressed mp3 file, but guess what? The mp3 file is becoming the defacto standard delivery format for music because people like the ease and portability over the sound quality.
The next wave in video won’t be a physical format. It will be a video version of mp3 files that people can download to a local device. Heck, it probably won’t be as high a quality as current DVDs.