You are only seeing one side of it tlarkin. You say that DVDs are getting bigger and better, but you don't think that Blu-Ray will improve as well? And also, you said that the PS4 will be out before the Blu-Ray games can be programmed to its full potential. You really think that developers won't be able to program something after 3-4 years? And for your information, the PS2 lasted 6 years. It came out in 2000 and the PS3 came out in 2006. So I have no idea why you assume that the PS4 will come out in 3-4 years...
with current compression technology a dev could easily fit 25gigs+ on a DVD14 disc. I am not saying blu ray will not be the next big thing, but lets realize a few things here. Beta max and laser discs were suppose to be the next big thing as well, and they both failed. Blu ray has stiff competition with HD DVD, and it is hard to say what will be the next thing.
With the crappy sales and the loss of profit Sony is taking on and the stiff competition they are getting from both the 360 and the Wii, sony may be forced to release a new console to simply compete
also the PS3 would have been out a few years ago if they didn't cram a cell processor and a blu ray drive in it. they had to wait for the price of the technology to drop otherwise the PS3 would be over 1000 dollars to buy a few years ago.
Blu ray sure may be the next thing, but developers won't be using it to its fullest potential anytime soon. you must realize also that most developers make games for other platforms as well that don't have blu ray or cell processors, and they want to sell their games in that market as well.