I don’t know the stats but I would guess more people have DVD players then Blu-Ray, so it makes sense for libraries to rather offer DVDs. DVDs is also one of these things that is good enough. The jump in quality between DVD and Blu-Ray is very unnoticeable (when fully immersed) compared to e.g. between VHS and DVD (or even between vinyl and CD).
Yeah bluray is really only necessary for 4k. And dvd probably beats streaming quality
The jump in quality from DVD to Blu-ray is huge, as much as it was from VHS to DVD. Going to 4k from there isn't noticeable, but going to HD in the first place is massive.