I don't see this as a BD killer. Far from it!!!!!
what i see would happen if they get it off the ground at resonable prices.
is this..
it would eventualy replace Netflix and Blockbuster.... or you would see Netflix offering this up as a supplament to there current service..
Netflix is offering it for sure, and thier thier theoretical intent is to do away with discs "eventually". It is in thier interests to make this happen, as the overhead involved in thier current business is too volitaile and make profitability and expansion uncertain.
However, it once again may come down to a format war. If the hardware and the file content are proprietary, then they may face the same set of problems if they are actually asking people to buy ridiculously expensive hardware. If they are wise, they will study format wars of the past (and present!).