I'm not talking in their prime as in surfing the wave of technology, I'm talking in their prime as currently holding market saturation. Everyone has a DVD player, not everyone has a Blu-ray player. Even today, very few Blu-ray releases outsell the equivalent DVDs. In that situation, it makes sense to release everything on DVD.
The industry wants DVD dead, they want everyone to upgrade their DVDs to Blu the way that people filled up skips full of VHS tapes when DVD came out. It's why so many movies and shows are released as combos, where you get Blu-ray, DVD and digital all in one box. At the end of the year, they'll tot up the number and say we sold so many Blu-ray units, and decide that DVD should die, even if 70% of the people who bought the combo can't even play the Blu.
and as for the reason for releasing it on DVD, the film quality TNG-R at 480i will blow the video quality original TNG at 480i out of the water. It won't be Blu-ray but it will still be infinitely better than what was originally released. You have to remember how crap the original TNG DVDs actually are...