The guy who wrote this article definitly doesn't know anything about digital video. The quality of a digital video depends on a lot more things than on the size of the file! Sounds like a typical blu-ray fanboy to me. "Omg, it can store up to 50GB so my movies will look some much better played from such a thing!". That's the only argument he uses: size is everything. He totally ignored other important things like codec used, codec implementation used for compressing and later decompressing the file, codec settings used, quality of the source material, filters used for compressing, filters used after decompression, display size, display quality, distance between viewer and display....
I already watched a couple movies in HD (720p) which could've easily fitted on a DVD9 (each file was less than 8GB in size, most were around 3GB per hour which is less than 7 mbit/sec) and each one of them looked great. Ok, The Fugitive (downloaded from Xbox Live) had it's flaws but you really need to know what to look for which most people simply don't do. But the movie still looked good and it seemed like most flaws were a result of bad source material. I've yet to try a more recent movie like 300 to see if my theory about The Fugitive (bad source) is correct.
A few years ago (from when DivX 3.11 became popular until the first people started playing around with the first H.264 codecs) I spent a lot of time trying different codecs with different settings and filters and I tried to understand how digital video compression really works. And one thing I learned real quick at that time was that SIZE alone means NOTHING. (<insert random juvenile joke here
>) As a result of that toying around with compression I know what to look for if I want to spot compression errors today. And by discussing my findings about image quality with other people I learned that without the proper background knowledge people won't notice minor quality losses (even though those loses are easily visible to the trained eye!).
On that HD-DVD (seems like we soon have to say R.I.P. *sniff*) / Blu-Ray vs. download discussion: I think they'll co-exist in the near future. Todays internet infrastructure just isn't good enough to offer 1080p downloads for huge masses. So people who want don't want "just" great image quality but the best technology offers will still buy/rent their movies on an optical disc. Others might prefer being able to rent movies without even having to get up from their couch (-> downloads).