What's amazing is that in the early days of DVD, with only 480i displays on the market, most of them small, most people did NOT see a dramtic improvement in quality like so many claim. It wasn't really until TVs started going way up in quality and size with more RPTVs on the market that the quality started to really shine.
It was the convenience of DVD which was a huge breakthrough for many, yet it was still years before it became mainstream with DVD as the product.
But, my DVD player doesn't play my old VHS tapes - my Blu-ray player handles the DVDs and Blu-ray discs... Still struggle with the portability, yet distributed audio & video in my home has those bases covered.
I disagree. The difference between DVD and VHS on a 480i TV is huge. For a long time, I had a 27" 480i TV, and I did not want to EVER buy a VHS tape once I saw a DVD on it.
Keep in mind, a 27" TV was the same size as a 25" TV, except with squarer corners. That was a very popular size of TV.
Then, of course, there is also the improvement in sound (if one had the necessary equipment to appreciate it, of course).
I do agree, however, that there were other factors that helped encourage people to abandon VHS for DVD, such as the convenience you mention. Given what a DVD can already do, that means that Blu-Ray is likely to be a harder sell than DVD was.