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Blu-ray lost nothing major, that's for sure.
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They lost the perception of overwhelming studio support.
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I don't think Paramount's move will have any effect on blu-ray's momentum. It will only confuse consumers that wanted to take the hi-def step.
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You just contradicted yourself. That is a big part of what this announcement is about. Some consumers who may have been ready to jump into HD by buying a BD player will now sit on the sidelines. If they are not buying media, the format grows slower, taking longer to become mainstream. The longer it takes to become mainstream, the fewer titles we will have to select from. The question is, how dramatic will this effect be?
Also, I'd expect for $150m that Paramount/Dreamworks will be expected to release titles at a faster clip than they have. I wouldn't be surprised to see another 20 before the end of the year, and announcing another 100 for next year.