I disagree. iTunes offers a massive amount of convenience that bluray doesn't offer. When you buy something on iTunes, you can start consuming it almost immediately. Versus a bluray, which you have to either wait to receive, or go to the store in person to buy.

This "on-demand" nature of iTunes is enough of a value-add to justify the increased price, at least in my eyes.

And don't forget that despite paying more, you get less, since on iTunes it doesn't come with any of the extras on the Blu-ray.

This is incorrect. For most movies there's an iTunes Extra section that comes with the movie when you buy it.

Maybe in the U.S. Not here. Nothing I've bought has extras. Looking at some current top movies (including Disney ones), no extras.

edit: after checking 10 movies in the top current movies, finally found one with extras (released by Fox). so it exists, but nowhere near "most"

Why? It's more convenient. I can have the iTunes movie playing in 10 seconds instead of going to the store or waiting for shipping.