When CDs first started to appear, they were treated and handled with serious respect(kind of how audiophiles handle lps now) but over time the respect for the format has been in serious decline. I think the first thing that started the trend was CD "wallets". Stripping off the case and storing just the disc and artwork. You used to have a nice rack or wall of alphabetized CDs now it's a wallet thrown in the back of your car. It didn't take long for the artwork to disappear or the disc to end up on the floor. Even if it got trashed, you could probably pick it up again used for a couple bucks. Selling your CDs used was another experience that makes you value them less. You bought it for $12 and sold it for a $1 and there are 10 of them in a bin for $3.99. A waffle maker holds its value better.
The rise of CD Burners was another nail. Suddenly you could buy a 100 disc spindle of blank CDs to record on for short money. They cost pennies each. How many of these have you seen getting scratched and crushed on the floor? Lose it, Scratch it, Burn another who cares. All this coupled with the rise of the MP3 served to undercut the real and perceived value of a CD. Unfortunately as the perceived value of the CD fell, manufacturer's and distributor's kept trying to sell them at the price that they held in the past. This gap in perception between consumer and label, is primarily responsible for driving people out of record stores and into downloading, burning.
It also demonstrates how product life cycles are becoming much shorter. Look at movies. The VHS tape had a long reign and with it came the video store. DVDs appeared but stores were able to survive (It's still a video store even when it's full of DVDs. Just like it is still a Record Store even though it is full of CDs) The new technology might have even bought them a couple more years. Then there was Netflix and suddenly video stores seem kind of lame. Now Netflix has been around for a few years and it is trying to shift away from mail delivery to something that would mimic "on demand". Netflix makes Video Rental look like a dinosaur but is undercut in a tenth of the time by "on demand". DVDs need to react faster than CDs and close the perception gap on value with the consumer. A DVD is headed towards life as a one use disposable item and needs to be priced accordingly. People will go the movies for 5-10 bucks and be happy. If DVDs dropped in price, you could still have people feeling good about getting them-but convenience and price are key. No one is going to be going to a video store. They need to be somewhere else. Because convenience and immediacy are perhaps even more important than price in driving new trends and sales.
Immediate access wherever you are is as important as the content. You may have the best movie,song, video, whatever, but if you lack the delivery system to send it to someones phone, laptop, next fashionable mobile device you are out of luck. And even if you have the best new idea