I'm going to disagree with that on three premises:
A: in technology you could make that argument about any new format. so, of course it's dead at some point, and will probably have a shorter life over all than dvd because of downloads EVENTUALLY catching up. that doesn't mean it's not worth investing in. that day could be in two years or ten years from now.
B: as a nerdy videophile and someone who uses both downloads and physical media there is no way in hell that downloads will best bluray in the near future. those that say that it will are in one of two camps. the folks who don't care about image quality as much, and those who have great broadband connections.
the far superior image and HD soundtrack on bluray is massive in size. when I rip one of my blurays to disk it's in the range of 19-25GB. Thats huge. even once i've run a very nice compression on it, to keep the blacks from crushing it's in the 10-12 range. Most people don't have the kind of connection speeds where they will regularly endure those download times. It will still be quite a few years before fast broadband is ubiquitous enough to kill physical media altogether. it may NEVER be good enough simply because there are a lot of people who truly want to have the physical media and the books, cases etc that go along with that experience. That also means having storage space enough for all those movies and backing that up. with the mess DRM is in at the moment and the price of a TB of data, you can bet that it will be several more years before storage is cheap enough to store entire libraries of hi def media. sure there is streaming, but that's not only inferior in compression, but again, there are always those folks who prefer an offline/owned copy of their stuff.
To say (not that you have) that the latest 1080p streaming image is anywhere NEAR bluray in quality would evidence that you would be in the camp that doesn't care as much about the image quality. Those same people have also been completely content with the crappy *** signal coming over digital cable. granted, that's probably a majority, but a manufacturer isn't going to kill physical distribution simply because 70 percent of people are fine with downloads.
C: It will be quite some time still before society has gotten to the point where everyone is not only comfortable using the systems needed for downloading and watching, but also to a point where extremely hi speed internet is completely ubiquitous. Until the some hundreds of thousands of people who still live in areas of the country with limited or no broadband internet catch up there will always be physical distribution. That's not even taking into account the rest of the world.
Also, one more point. Directors and editors are ALL film snobs. They will always insist on their films being available in the best formats possible at the time. So, until digital distribution offers image/sounds equivalent to bluray, they will push for copies on physical media.
That doesn't even take into account the fact that even this year at CES there were grumblings of some studios beginning to shoot with 4k cameras and output to that format. There were several TV sets that display in that range. So, as soon as "hi def" becomes "extreme def" there goes another huge leap in file size.
Sorry for the long post, I just hate to see anyone miss out on a great and quality experience for sake of always fearing the next thing. People were saying DVDs were dead 8 years ago, and here they are still selling like hotcakes. You can save money by waiting a few months after a release and catching it on amazon for half price. Also, some films really don't get a tremendous boost from being shown at 1080p since they are grainier, etc. I just get a 720p downloaded version of those films. I only spend money on bluray when it's that film that you want in you collection. The ones you watch year after year.