Microsoft said in an interview that Xbox 360 users don't seem to want Blu-ray, as they don't get a ton of requests for this feature:
Even though our market sources indicated Microsoft Corp.’s intention to make available an external Blu-ray disc (BD) drive for Microsoft Xbox 360 video game console, the company itself claims that the platform does not need the support for the format. It is obvious that video game consoles are acquired to play games, but while the PlayStation 3 can play BD movies and Wii can be controlled by motion-sensing controllers, the Xbox 360 can support neither technology.
“It’s not a feature we get a ton of requests for. We really don’t. When you ask people the list of things they want to see us spending time creating in Xbox, Blu-ray is way, way down on the list,” said Robert J. Bach, president entertainment and devices division at Microsoft, in an interview with TechFlash web-site.
Microsoft itself is trying to sell content using its own Xbox Live network.