Dieing? ummm it fought off the formatt war with HD-DVD, so yeah its alive and kicking. People said the same thing about DVDs back in the late 90s, they said VHS will stay, ha 5 years later VHS died and DVD came in full swing. Give it time, in a few short years blu-ray will be all the rave...
Online, cable, and satellite content delivery, and new compression formats, will effectively destroy blu-ray as a mainstream distribution method. It will hang around in a niche format for the next five years but in effect it is dead already.
Here is an interesting example of the discussion at a CNet Blog:
http://news.cnet.com/8301-10784_3-9888515-7.html
In short, physical media are simply too restrictive. Again, those really interested in HD over SD will flock to Blu-Ray, but in comparison to mainstream consumption, this group will be small indeed.
Time will tell.