Oddly enough that downturn has been linked by some as being related precisely to enthusiasts not buying catalog anymore because of problems like DNR Oh well, likely no way to pinpoint the cause of catalog declines definitively so kind of a moot point.
Um.. you're really not addressing the point at all. The point is that film in theaters has grain. A good bit of it, certainly more than the home video versions of said films (multi generation prints, more scratches, etc..). And yet, despite all that grain, films have continued to be popular for decades at the theater. So if people go to the theater and see grain and then don't summarily drop theatrical visits, why draw the conclusion that if the same people see grain on a Blu-Ray they'll suddenly drop the format? Or even notice or care for that matter? When I saw Minority Report in the theater I thought it was darn grainy, but I don't recall anyone afterwards talking about how "dirty" it was, much less claim they were going to stop going to the theater
I mean, seriously, pick one. Either people view a movie through a given distribution method (such as theatrical, DVD or Blu-Ray) and see grain and give up on said distribution method. Or they don't. There's absolutely no reason to think that people are perfectly happy with grainy, multi generation film prints projected on 30 foot screens and then suddenly think the same films are "dirty" and ugly on their 4 foot screens at home.