The problem with iTunes is that the on-line experience is often not an overall win in comparison to the other methods of purchase. What I mean is that when I rate on what are my three most important factors -- convenience, cost, quality -- iTunes movies generally win only on convenience. Cost at best is usually only a tie and quality in most cases is definitely a loss (iTunes standard definition is often worse than a DVD and the iTunes 720p, while pretty good, can't compare to Blu-ray).
I'd be willing to compromise on one factor if iTunes could at least win on the other two (within reason, for example, I don't want something that looks like a bad copy from well-worn VHS tape even if it is cheap). Or, I'd be happy if iTunes could win on one and at least tie on two.
What I want is the iTunes convenience with quality that is at least equal to a DVD and at a cost that is comparable to a DVD. I'd call that situation a win, tie, tie which would definitely tip the scales in favor of iTunes.
As for the HD content on iTunes, that's a compromise in quality which often is difficult to rate as a simple win or loss since it depends upon whether you are comparing to a DVD or a Blu-ray disc. In these cases if the cost is as low as a DVD I'd probably rate the purchase as at least a win, tie (cost), win (quality). Otherwise, if the cost is as high as a Blu-ray disc then the purchase becomes at best a win, tie (cost), loss (quality). As you might expect, I only prefer the former (win, tie, win) while the latter (win, tie, loss) is far too often the case with iTunes HD content.
When you think of it, however, this is probably just how the content providers/movie studios want it to be. They don't want to give an advantage to iTunes, they actually want it to be viewed as a fairly poor compromise (win only on convenience) from the traditional methods of distribution.