Michael, that's a can of worms you probably don't want to try to address here... too much "whatever Apple offers is the best" adulation, even at the expense of logic, hard specs, etc.
In a nutshell, if a person wants maximum quality picture & sound, there is no contest- BD all the way. The "I can't see the difference crowd" will dismiss this statement but any objective person with reasonable knowledge of each will know it is the truth. Key advantages of BD over iTunes 1080p:
- Much more modern, better audio codecs (Dolby Digital is a 1992 standard; much progress on movie audio has been made since 1992)
- Flexibility on Mbps so that more actual detail is in the picture rather than being compressed out (and then dynamically invented on the de-compress).
- fps rates other than 29.97. That gets you native film (24fps) or "butter smooth" motion (60fps).
- You own BD media. So you can sell it or leave it to others when you die. You license iTunes media and it is sold by Apple as a nontransferrable license. Technically, it dies with you. See: http://www.marketwatch.com/story/who-inherits-your-itunes-library-2012-08-23 for more.
- Portability- you can take the BD to someone else's house and have a good chance of being able to play it on their big screen. Airplay tries to be the alternative to this but it depends on friends having necessary Apple equipment to make that go (or you bringing the extra equipment, though that means bringing things bigger than a BD disc & case).
- If you care about it, BD has 3D playback
- If you care about it, BD typically comes with lots of extras
- In my experience, you can often find BDs at less cost than the same movie or show in iTunes.
The primary benefit of iTunes 1080p is convenience (of access). Some argue about the "hassles" of managing a disc collection. Some argue about the commercials at the beginning of the discs (playback). Some argue about the future (that discs are not the future). Some argue against BD just because Jobs called it a "bag of hurt". Some talk about rare scenarios (Kids with jelly, etc). Some talk about file sizes and/or bandwidth issues. Some talk about "The Human Eye can't see the fine detail from average seating distances..." arbitrarily ignoring all the other variables that go into what a human eye can and cannot see. But the biggest pro-iTunes argument is the "I can't see the difference" argument (so apparently you can't see the difference either). Note that this last one just slides with whatever Apple decides is the current standard (for example, the same argument flew for years when Apple chose to stick with 720p over 1080i or 1080p).
Bottom line: for someone concerned with maximum picture quality & sound, there is no contest at all. For someone concerned about other features & benefits besides those, logical & illogical arguments and rationale can- and will- fly in abundance. Asking about this here will just get you mostly overwhelming arguments pro-Apple.