You have an HDTV? Why did you buy one when standard definition TVs was completely satisfying? You do realize that an HDTV is the TV equivalent of Blu-ray, right?
You're under no obligation to buy Blu-ray. If you're satisfied with DVD, then stick with DVD. I think many DVDs look good, even on an HDTV, but the point is that Blu-rays look *better*.
Perhaps Blu-ray will eventually be replaced, but this--and the time frame in which it will happen--is pure speculation.
As far as cost goes, the new releases are expensive for both DVD and Blu-ray. Blu-rays usually costs more, but not always. For example, the Watchmen Blu-ray is $3 less than the Watchmen DVD on Amazon.
If you buy your Blu-rays at a brick and mortar store (i.e. Best Buy, Borders, etc.) you're not a very savvy shopper. I have close to 20 Blu-rays in my collection and I have yet to spend more than $20 on any of them. If you're patient and you shop around (Amazon, eBay) you will get Blu-rays on the cheap.