The war ended to soon and to close to Christmas. The war should not have been over until both formats were complete, compatible in capability and price (not in specs or future, but in actual shipping product).
By ending the war so close to Christmas the companies did not allow people to enjoy their entrance to HD movies. It was far enough away so they could not return them, but not far enough away to really begin to like them. This just leaves a bad taste in their mouth. I suspect that most of the people who got HD-DVD players will not make the jump to Blu-Ray anytime soon.
If instead the war had ended later this year, say right before the next Christmas season. There would have been less backlash. In addition, there would have been a larger group of people used to HD movies.
Blu-Ray won primarily because the movie studios liked the extra security. But, this is not for the consumer. No matter how you put it extra security is a pain for the consumer. From region codes, to upgrading players, to the cost for low end providers, to the ability to create your own disks.
As for Blu-Ray supposedly being a better standard. The studios are having a hard time convincing people the quality of HD is better then upconverted DVDs. Imagine trying to convince them the extra space makes much difference. So far in practice it has not. Even if it did, the difference would be even smaller then between upconverted DVD and HD. The law of dimensioning returns.
BD-Java should be able to produce better content. But, so far it hasn't. So once again the war should not have ended until the public saw movies coming out on Blu-Ray with better content. The problem is HD-DVD came out with better content.
Future Blu-Ray players will be able to perform as well as current HD-DVD players. But, again this is not true yet (except for the PS-3). Although the PS-3 is a good Blu-Ray player, it has a lot of negatives. The biggest being it does not work with standard remote controls. It also is not a standalone player. Many people do not want a game player.
Finally, price. Blu-Ray is still too expensive for most people vs. the benefit. It is not just the cost of the player, but the cost of movies. Until the cost of players and movies come down in price it will never take off.
The only possible positive is that now that Blu-Ray has won and it has to compete against DVD, maybe movies and players will come down in price. However, it may also spell the slow death of HD.