Nothing like Beta vs VHS, actually. Don't get defensive though, I didn't say you botched your prediction or anything. Just that cost, if anything, was against BluRay.
What you forget is that originally the BluRay discs needed a
full size caddy which was pretty expensive and made it incompatible with the current crop of DVD production.
What made the difference is that Sony owned a movie studio and Toshiba didn't. Sony was much more entrenched in Hollywood and knew how to get the other studios lined up. Sony also bundled the drive with the PS3, as opposed to Microsoft, which sold it as a separate device.
From
wiki:
Deciding factors
The format war's resolution in favor of Blu-ray was primarily decided by two factors: shifting business alliances, including decisions by major film studios and retail distributors,[38] and Sony's decision to include a Blu-ray player in the PlayStation 3 video game console.
Basically, when Warner jumped ship from HD-DVD to BluRay, that was the end of that. Notice that at that point HD-DVD was cheaper than BluRay.