The SACD is a "super" CD, it sounds better, offers multichannel, high-resolution sound, and hybrid SACDs are backwards compatible with CD players. Sony initially pushed SACD as a CD replacement and the market yawned. OK, but you would have thought that audiophiles would have, en mass, supported SACD, especially after so many of them bashed CD for its harsh digital sound. SACDs, at least ones sourced from high quality recordings, really do sound better than CD (but a crappy original recording, remastered to SACD, still sounds crappy). No, just a small segment of the audiophile market embraced SACD, why, I'm still not sure.
So my question is, now with the distraction of the HD DVD/Blu-ray format war finally out of the way, why would the market embrace Blu-ray, which is merely a "super" DVD? Yes, the format can hold up to 25GB on a single-layer disc and 50GB on a dual-layer disc, offers 1080i/p resolution, and a host of other features that, for the most part, no one cares about. My videophile pals tell me that Blu-ray's superior picture quality won't be all that visible to most people with 50 inch or smaller displays (especially when their DVDs are upconverted to 1080i/p). Hell, most people are pretty happy with DVDs and already think DVDs are HD.
I also think that the problem for both SACD and Blu-ray is that the new and improved discs looked almost identical to the older format. There's no perceived difference between the physical appearance of a SACD and a CD, or a Blu-ray and DVD disc. When CDs were introduced, the sonic differences between LPs and CDs was obvious, plus the difference in the way the played was likewise unsubtle. CDs also looked way cooler than LPs. The same benefits to the consumer were apparent during the transition from VHS tape to DVD. Consumer didn't have to be "educated," and once prices came down on DVD, the vast majority of VHS holdouts jumped on the DVD bandwagon.
With HD DVD out of the picture, I have no doubt Blu-ray will do better, but it will grow far more slowly than DVD did. Blu-ray will likely remain a niche format, while the market for downloads gains more and more momentum. DVD sales, already past their peak will continue to decline.