The whole point of BRD was to provide HD movies and other large format sotrage (remember it was conceived as a writeable format, with 50 GB writeable discs for any data, not just movies). I imagine given the option, studios will publish those HD movies in the easiest way possible. If they can sell HD movies using quick and easy production tools without having to create extra content to fill up a disk, wouldn't they choose that? I'm sure when BRD was being created, discussions with the film publishers didn't involve much of them saying 'we want to put loads and loads of extra content in there, so make the disk capacity huge'! I'm sure there was more along the lines of 'we've already got HD movies for films using MPeg2. Can't we just use that?'
And for those studios that do want to produce discs with loads of content, there's AVC and VC-1 available as options. The BRD standard is just for a 50 GB disk and a number of media formats. It's down to the studios to use them how they choose (as long as the tools are there of course). the BRD spec certainly isn't not forcing studios to use the quick and easy (as I understand it) MPEG 2 methods, so any complaints consumers have should be levied at the studios. Personally I'd rather have the best quality movie experience over relatively moderate movie quality and lots of extras.
The whole point of BRD was for Sony to provide a new format using Mpeg2, get everyone on board and make tons off royalties: both codec and each disc and player produced. It was the "perfect" scenario. The sole use of Mpeg2 also made BD50 necessary. Then the DVDforum shoot out occured and VC-1 won out over Mpeg2 and AVC, in that order. After that, HDi was heavily picked over Java for the interactivity layer. Afraid that MS would have full software control over Blu Ray, BR camp did everything imaginable to keep VC-1 out, even though MS submitted VC-1 to SMTPE and let them decide how to manage the codec.
Fast forward and the BR camp broke off the DVD forum and created the BR Working Group. At this point AVC took some of the VC-1 features, added it to the spec and "AVC HP (high profile)" was born. They conducted independent testing of AVC HP in the BR Working group and MS was not even invited
Same for Java. At this point they decided to drop VC-1 from the BR spec but Warner and Paramount were going to pull their support. It was a huge mess. Panasonic were so convinced that their AVC HP encoder would be King and VC-1 would be dropped that they built their first BR player without VC-1 support. Warner and Paramount held their ground and MS had to promise equal VC-1 support to both formats. VC-1 was reluctantly added again.
As for Java over HDi, we can clearly see that the number of Java authored titles is even LESS than the number of BD50 titles out there! Even more interesting is that Sony proprietary "Blu Wizard" does not use Java either! Infact, it was quiet clear that Java was no where ready to be used that they had to have 2 specs of Java, one being BD-J which is very basic and mandatory now and one being BD-Live which includes PiP and Online interactivity. BD-Live is not mandatory until June 2007 thus you don't see any BR player (aside PS3) with even an ethernet port. This is also why HD DVD titles have PiP commentary where as none of the BR titles do.
You can ask "CJPlay" on AVSForum about VC-1. He's a Warner compressionist and he'll be first to tell you, that it's software support adn tools, not the overall spec that is important and MS' support of VC-1 is out of this world and tools continue to improve at a rapid rate.
FWIW, had the BR Camp listened to their own Technical working group and picked HDi over Java, MS would be 100% neutral in this war.
