well, if you are able to pull the MPEG2 streams and AC3 audio out of the .vob files, then you could potentially author a new disc (you'd have to create a menu) containing all of the movies. The problem would be extracting those streams. The only way to do that right now would be to rip with MacTheRipper and then re-encode with MPEGstreamclip. I don't know of any utilities that will extract the audio and video from a .vob without re-encoding everything.
There is definitely no way to keep the menus.
BD is just a disc format. It doesn't necessarily mean hi-def. That's just what it's main use has been. Studios could release entire seasons in SD on one BD. That'd be sweet.