From all the stories I've read , BD isn't dead, but the entire model of buying or renting physical media is expected to change over time to downloads or streaming media instead of purchasing physical media. When the media reports on those stories, they use sensational headlines, just like they do with any news story. (WW3 might start tonight. Details at 11.)
BD players are still relatively expensive, but they did win the format wars with HD-DVD. BD is everywhere now, and all new releases are released on DVD and BD.
There's really no reason for the physical media to be any more expensive than DVD, but the studios charge more for BD media because they can. (OK, maybe it costs them slightly more to produce BD media, but the difference isn't all that much compared to the prices they are charging.) But by doing so, they are also shooting themselves in the foot. Look up pricing on "The Dark Night" on Amazon to see the difference. DVD wide-screen edition, single disk, $14.99. BD version, which includes a digital copy you can put on your computer and BD Live features is $23.99, which is reduced from a street price of $29.99. Sure, the extra features are nice, but if you don't want them, you still pay for them.
If anybody really thinks there's little quality difference, just try watching Planet Earth BD on a good quality, large screen 1080p native display. If you can't see a difference with that, stick with your old Amana or RCA console TV from the 50s.
-David