If disk space is cheap, then why compromise (and lose the high bitrate audio) by Handbraking them? Just save the BDs to .ISO files so that you have everything....
Well, I still need to play these files in multiple rooms of my house. I like using an ATV because it's cheap, small, low-power, and has a better UI than other streamers (whether running the native UI or XBMC).
If I use XBMC, I can pretty much play full-bitrate Blu-ray rips, but only if they're encoded with h264, and I don't believe that XBMC supports lossless audio (perhaps that's changed more recently, or perhaps you can convert DTS-HD and Dolby TrueHD to a different compatible lossless format). But I think I can live happily without lossless audio, and it will save a bit of space, and keep compatibility higher. But even then, the Blu-ray rips are going to be 18-28GB. While the ATV appears to be able to play these files smoothly, I do run into stutters and pauses which appear to be network-related, even when hard-wired over ethernet. And if a video isn't encoded as h264 (e.g., VC-1), the ATV's GPU can't decode that natively, so it won't play smoothly anyway, and you *have* to use something like Handbrake to convert it to MP4.
So an advantage of getting the files down smaller (say 10GB) is that they should be able to flow through the network more smoothly (even wirelessly). Plus, if I convert them to MP4/M4V files, I don't have to bother with jail breaking/XBMC, which saves another hassle, and allows me to take advantage of the native ATV's video buffering feature, which seems like a better method than how XBMC buffers video. Plus, even though storage is cheap, smaller filesizes mean quicker transfer times when moving them from one hard drive to another.
Finally, even though I don't personally have a need (currently) to play movies on my iPhone, my wife has an iPad 2 and I could envision someone in the house (or on vacation) wanting to use that. Again, you could jailbreak that and install XBMC, but you'd still have to work through the limitations listed above.
And who knows...maybe having all of these movies readily available to stream reliably to my non-jailbroken iPhone 4S might lead to other use cases. For example, quickly pulling up a movie/scene so that I can remind myself about what transpired when discussing a movie with someone, or maybe taking a snapshot of the scene to post somewhere. And when I go on vacation, maybe I just load up a few movies on my laptop's hard drive or a single external drive to take with me, rather than have to bring all of my hard drives on the trip.
If you're only going to play these files inside your house, can run gigabit ethernet, don't mind using an HTPC or more capable streamer, and only have a room or two to serve, than keeping the full rips with lossless audio is definitely a desirable choice for many. For me, I'm willing to give up *some* quality (but still have a far superior picture compared to DVD) for the added convenience factors that an < 10GB MP4/M4V file will offer.