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When DVD came out there were no MGM Double Feature Midnight Movies for $12. DVDs were around $20. Over the years the number of people who own DVD players has increased to the point where casual movie fans will blind buy low cost DVDs, that's why you see them everywhere.
Blu-Ray is a *beter* product, it has a premium price. Less people own Blu-ray players, so a much smaller base of customers is available.
Furthermore, most Blu-ray movies are only a few dollars more than their DVD counter parts, at least the street price is. New DVDs are generally $18ish dollars and new Blu-ray movies are generally $25ish, and many times even much less than that. I have a number of $15-20 Blu-ray movies.
I don't think DVD is going anywhere, so Blu-ray isn't directly replacing DVD. I don't think we'll be see low-cost double feature midnight movies showing up on Blu-ray anytime soon.
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