Outside of the perfection stuff, I pretty much agree with everything you just said
I'm not lobbying anyone in this thread for downloads to take over the world and eat our children or anything... I do embrace Netflix because it's the most consumer-friendly form of downloads with their buffet style pricing vs PPV.
It will take paradigm shifts in the industry for downloads to catch on, even before the HSI issues are resolved. It hasn't happened yet which is why things pop in and out of availability for streaming, and the selection is so limited. TBH the service would be crap if it weren't for Starz... that was a great big leap forward.
Just a few years ago who would have thought it would become the norm for networks to show their TV shows on the internet for free a day after they air? That kind of drastic change is what it will take to allow for buffet style movie download services to take hold (and for healthy and necessary competition to spring up) and for it to truly be a viable alternative to BD. Before that happens we could see a revolution of some kind try and beat downloads to the punch... who knows, drm'd flash drives allowing you to download movies to play on the go, giving you that feeling of 'owning' it?
So until then... BD is new and expensive (lol, Sony just said the PS3 is still in it's early adopter phase, maybe they think the same with BD? at least that's a little closer to the truth) and the economy sucks. Wife and I are content with the limited streaming selection from Netflix and the 1-at a time BD from them. Before upgrading our service to BD, we got Eagle Eye... and in a handful of scenes I wish I had gotten it on Blu-Ray, otherwise I don't feel like we really missed anything. For Blu-Ray, and the price we're paying, perfection should be expected, but the masses want 'better'... 'perfection' is just a marketing term for them.