Price is the way to get the penetration they desire. To kill off DVD in three years they would have to:
1) Sell BD players at $50 or preferably $30.
2) Put out the BD version of ALL available DVD content
3) Offer a "rewards" program, along the line of that existing DVD players and movies can be traded in for the BD versions and they will go to your house to do it (setup help included for those interested) and have a huge truck ready outside to replace all the DVDs with identical BDs. To encourage full cooperation in this takeover plan, a free 32" LCD HDTV would be included to reel in the last of the holdouts.
However, if any of the above steps are omitted, DVD will be here for a very long time. Just waaaay too much content, waaaay too many SD TVs and DVDs and waaaay too many people who just don't give a damn about HD and would rather pay 1 cent less for a movie whether it's SD or HD.
Trying to fight DVD and HD DVD at the same time just creates too many bad guys in my opinion. That would eventually include the consumer.