Joe,
To start, the reason why one side argues that the other side is wrong is because no body wants to admit that they might be wrong. In other words, you won't agree with me that HD-DVD is the best choice, nor will I agree that Blu-Ray is the best choice because I don't want to even think HD-DVD is going to lose.
Now onto your questions,
A) Players and movies would provide better PQ and Sound and prices would be falling as quickly? um, OK, if there is only 1 format, it slim-lines production of players for everyone, the disc for all companies, packaging, advertisements, etc... Lets say between the two "camps" there is 50 million spent on R & D on making technology better, and another 30 million spent trying to convince the world that one format is better than the other. If there was only one format, 80 million would be spent on R&D. How wouldn't that make the products better?
B) Would a single HD format be selling in such low numbers at this point?
NO, I've said it before and I'll say it again, if there was one format, high definition DVD's (both use a blue laser) would at least combine their sales into one. Instead of Blu-Ray selling 450,000 movies and HD-DVD selling 250,000 movies, it would be 700,000 HD movies sold. Then on top of that, no more confusion, more people would be out there buying movies, players, etc. because the fear that they might pick the wrong format wouldn't be there anymore. So now instead of combined 700,000 movies, your pushing 1, 2, 3, 4, 5, ... million movies!
C) Would as many of us be using that format right now? There would be more, I don't have a crystal ball, but I can't see there not being more.
D) Would we have anything to be so passioned about right now?
How about we should be worried about something else now? Heck, take the money that some have used to buy both formats with, and give to the poor--through charities or whatever--getting away from fossil fuels period, let alone our dependence on foreign nations for our oil. How about actually saying world peace and really meaning it. There is no end to what we could be passionate about.
Ok, so why do I lean towards HD-DVD? (to better answer the question about why both sides argue against the other.) I don't like Sony. Plain and simple. If I can have it my way, I'll never buy anything Sony or Sony related in anyway. Sony was/is a big backer in Blu-Ray (PS3, Sony Pictures, R&D, etc.) and that is enough for me to pick the other format (I have the HD-DVD player for my Xbox 360). Now, if, and I say if, HD-DVD ends up going away, I'll of course buy a Blu-Ray player (guess what brand I won't buy though? LOL). But until then, until I have no other choice, I'll stay away from Sony or anything coming from Sony.
Now, ask me the obvious question, "what about which format is better?" IMHO, neither has an edge over the other to make it a clear winner (HD is HD is it not?) Now I'll admit Blu-Ray has a capacity edge, but beyond that, noda. Both display HD picture, both have quality audio, etc... For every person that says X has better audio/video than Y, there is another saying the opposite.