Regardless of the views of the competing standards there are now reasonable demand for playing both format and given the size of the HD content and the speed & costs associated with downloading, I just don't see that downloads will be viable for the majority anytime soon.
I agree with your premise. Unfortunately, I doubt seriously that all the pieces are in place. Even Microsoft is refusing to offer Blu-Ray or HD-DVD decoding support out-of-the-box on Windows Vista's WiMP, most likely due to licensing costs. These costs are extremely significant (I'm unclear on the exact fees involved but it isn't cheap at all).
Plus, there are so many hardware hoops you have to jump through to enable full-quality playback (short of using a crack method). You can't use VGA or (most) DVI outputs, you have to have a video card
and monitor that fully support HDCP (and even some of them that said they do, turn out not to), and you have to make sure you're running at the proper resolutions (if your video card doesn't have 2 HDCP keys, then you can't run at higher desktop resolutions than 1080p or HD playback won't work), the software code path has to be "protected" (which in effect limits you to Vista), and on and on...
All in the name of DRM that was cracked immediately, and continues to be re-cracked before the discs that employ the new methods even come out. Its absurd.