I think people who subscribe to these forums believe everyone is AV crazed and its simply not true? I believe for the most part that your average consumer is very content with his SD up conversion dvd player, CRT tube and HTIB set up. In fact from the people I know most of them don't care for this hobby.

I think you are dead on with this and I think it is the fanboy base, mostly the opposition, that sees a lack of immediate worldwide acceptance as proof positive of BD failure.
Blu-ray is establishing itself as a 15+ year format. Just like VHS and DVD are. DVD will take years to replace and it will be a gradual changeover as BD players pricing falls, and people replace their tube TVs for HD displays.
Many of my friends only own a handful of DVDs, and only a few own HD displays unlike the four I have in my home. I think where BD has really done well is setting expectations of steady growth and then meeting those expectations. Not phenomenal growth, but steady and solid. The CEs involved with Blu-ray are on board with this growth, and they know what to expect. From 2% market at the start of 2008 to 8% market by the start of 2009. Solid growth, but not out of this world - just steady.
So, my friends, while they know about Blu-ray, aren't running out to buy it right now, like they aren't replacing their 32" CRTs with 50" LCDs. They DO want it, they are aware of it, but they are in no rush. They'll do it when money allows and pricing is right.
Not one of those things stopping BD from growing at a steady pace.
Keep in mind, most people actually were happy with VHS up to the day they got a DVD player, then the price was at a point where they were happy.
I think a big shift is how Blockbuster and Netflix are so strongly embracing Blu-ray right now. I remember Blockbuster taking YEARS before they started carrying DVD, and then they would have 3 DVDs for 20 VHS tapes, and the DVDs would be rented out, while the VHS tapes were in plentiful supply. The fact I can go into Blockbuster now and rent Blu-rays at all even when market penetration really is so low, just blows me away.