Maybe I have amazing super eyesight and hearing (doubtful), but you have to be kidding, right! There is a *big* difference in both picture and sound quality between Blu-ray disc and iTunes "HD" movies. Even discounting the argument that iTunes movies are 720 (not "full" HD) resolution (in any case my 42" Pioneer plasma TV is only 768), the higher bitrate of Blu-ray means noticably better picture quality. And the sound is uncompressed on Blu-ray, the difference in sound quality very evident even with non-HD soundtracks. I have a very nice Blu-ray player, Pioneer LX71, and a nice TV, but the difference should be clear on any reasonable setup (unfortunately I haven't yet seen the BV7 Blu-ray, I gave up waiting for it and went with non-B&O!).
iTunes is very convenient, and slick, and definitely meets a need (and I use it sometimes) bit nowhere near Blu-ray in quality terms. I suspect that's why Apple are reportedly about to embrace the "bag of hurt" and include Blu-ray playback on future machines.
Blu-ray will likely have a limited lifespan (as has been discussed on BeoWorld before), as it'll be irrelevant once full resolution, high bitrate, uncompressed files can be practicably downloaded. But that won't be anytime soon, at least not in the UK!