Understand your point and well taken.
It really depends I guess on preference and how large your TV or Movie screen is as well. I think the average consumer does not yet have a monstrous large screen, though probably many on this forum may have. I do, but DVD and Blu-ray still looks fine...
Basic business is that if it does not sell, then you don't make it or sell it. Well...DVD and Bl-rays are still selling, so that means that people are still buying. They keep making DVD and Blu-rays, even after Apple "tells" everyone it is a waste. Why? Because people still want them.
If you plan on watching a movie just once, then paying $6 for a rental may works since there are no rental stores really anymore in the U.S. Netflix and other services take up that option now. If you plan on watching a movie more than once, then sometimes owning it is more cost efficient then having to rely on subscription and streaming. Space to store is not that bad with disks, depending on how you do it.
Outside the U.S., DVD and Blu-ray technology are still popular. I was surprise to walk into a Tower Records in Japan and I had a flashback to the 1990's in the U.S. Looked "just" like the stores that I use to go to back in 1990's. Some place prefer paper books and physical DVD and Blu-rays still over digital cloud and subscription stuff, especially outside the U.S. Apple and others are trying to break into these markets...but the consumer has different preferences and likes and they really don't want subscription or digital stuff like that.
I know it is hard to believe, (apple) but some places in the world have different tastes and likes than the U.S.
I am a big techie and use everything...but going back to DVD and Blu-rays (because I work in other countries now) made me remember how "easy" it is to use and less of a hassle than the current options. I can go to a DVD & Blu-ray store (again outside of the U.S.) rent a DVD for $1 or $2.50 or $3.00 for Blu-ray depending on how recent. Keep it a week or so to watch. I forgot How I use to like going to the store and looking around physically and find something to watch...or physically read if desired.
Again, maybe preference of course...but I have done both sides of the coin and find DVD and Blu-rays easier overall to just pop-in and hit "play" instead of the all of the costs for cloud, subscription, iTV, iTunes "bla bla" or trying to find a digital movie on external drive. I can just go to my shelf, grab a physical disk that does not take up much space, pop it in..and quality (especially Blu-ray) is good.
I work in the corporate video industry and I find myself pulling out my old MacBook Pro 2010 more so lately that has a DVD player, make a DVD quickly to view and see the results before making digital or other media formats for my clients. Reliable and faster...cost is cheap now to do. I even have again started to use the MacBook Pro 2010 to watch movies. I was amazed at myself. It was "just easier".
That's an interesting perspective to me, because I see it completely differently. I do sometimes get a bit of nostalgia for the old Blockbuster days, but then it snows outside and I remember how much better it is today.
To me, having to go to a physical location and deal with the fragileness of physical media is annoying - get in the car, drive somewhere, choose from with a limited selection or risk having the movie I want out of stock, worry about late fees, drive back or go out of my way the next day to drop the movie off. Then sometimes the disk is scratched or dirty, and it won't play or it has skips or it just stops half-way through the movie. If it turns out the movie isn't as good as I thought - I have to repeat the whole process to go get another movie, or I have to pick two or three movies each time which make it more expensive. If I've been drinking, can't drive anywhere then...
With digital - it's just easier. My butt is in my warm home on the comfortable couch the whole time sipping on a whiskey or beer, click click click, done. No skips, no dirty disks, no driving. If the movie sucks, no problem, there are literally hundreds more to choose from instantly.
That said, I have a very reliable internet connection. Nothing super fast, 300Mbit, but not slow either. My AppeTV is wired over gigabit to my router, which is rock solid. None of that is cheap, and I understand many places in the world don't have access to reliable fast internet, not everyone has a house wired with Cat6 ethernet cables, and not everyone can afford an expensive router. If I didn't have those things, I would probably prefer renting disks too.