Most people lack the bandwidth to be able to stream 720, yet alone 1080 video.
A 1080p Blu-ray rip is usually around 10GB for a 2 hour movie. Streaming 10GB in 2 hours requires a connection speed of around 12Mbit/sec. 720p rips are 5-6GB, so they'd require 6-7Mbit/sec. Apple only offers 720p right now, so most consumer broadband connections should be able to stream their shows.
I in fact struggle to stream even low-quality YouTube videos without having to wait for it to buffer for a few minutes.
Low quality YouTube videos are 480x360, with bitrates around 900kbps (that's kilobits, not bytes). So there's probably an issue with your ISP or YouTube's CDN. Anyway, back on topic...
I'd bet against Blu-ray in the long run. Video on demand has quite a few advantages. It doesn't require the purchase of a new player or optical drive. It offers a shorter time from when you decide, "I want to watch this." to when you actually start watching it. If you don't have the bandwidth to stream a movie, you can still download it faster than it takes to ship the Blu-ray disc. Even if you run to a store and buy/rent the disc (let's say 20 minutes round trip), in that time you could have buffered 1.5GB over a 10Mbit connection. Blu-ray beats streaming when it comes to video quality, but connection speeds and codecs are only going to get better.
A 1080p Blu-ray rip is usually around 10GB for a 2 hour movie. Streaming 10GB in 2 hours requires a connection speed of around 12Mbit/sec. 720p rips are 5-6GB, so they'd require 6-7Mbit/sec. Apple only offers 720p right now, so most consumer broadband connections should be able to stream their shows.
I in fact struggle to stream even low-quality YouTube videos without having to wait for it to buffer for a few minutes.
Low quality YouTube videos are 480x360, with bitrates around 900kbps (that's kilobits, not bytes). So there's probably an issue with your ISP or YouTube's CDN. Anyway, back on topic...
I'd bet against Blu-ray in the long run. Video on demand has quite a few advantages. It doesn't require the purchase of a new player or optical drive. It offers a shorter time from when you decide, "I want to watch this." to when you actually start watching it. If you don't have the bandwidth to stream a movie, you can still download it faster than it takes to ship the Blu-ray disc. Even if you run to a store and buy/rent the disc (let's say 20 minutes round trip), in that time you could have buffered 1.5GB over a 10Mbit connection. Blu-ray beats streaming when it comes to video quality, but connection speeds and codecs are only going to get better.