Your first sentence doesn't match the next two. Unless a large number of consumers feel compelled to switch to blu-ray, the low price and wide availability of DVD players should have the effect of extending the viability of DVD, not reducing it.
(I don't know about the decline of "functionality and features" in DVD players either. Most people don't use anything fancier than basic navigation and the subtitles button.)
All technology goes through a similar cycle of expansion, proliferation, and decline. 20 years ago, I could have bought a VHS recorder with S-VHS capability, dual tuners, jog shuttle, multi-event timer, videoplus, subtitle capability, and a hundred other things, and it would have been built to last. Today, if you still have a VHS collection, and some people do, the most you can hope for is a cheap VHS Player, which will play your tapes, rewind and fast forward, and that's it. It won't even record.
The same thing with CD players. When the main technology is personal mp3 players, personal CD players are limited to the £20 models that play discs through headphones and that's it. 15 years ago, there were Sony discmans, compact, stylish, and feature packed. I could say the same thing about tape decks. I bought a hi-fi ten years ago, radio, tape and CD, all quality stuff. I had to replace it this year, but they don't build tape decks into hi-fis anymore. You might get tape players in boomboxes, but they don't record anymore. It's called progress.
DVD players will die, and die very quickly as Blu-ray plays DVDs as standard. If you want to watch DVDs, you'll just go into a shop, pick up a £40 Blu-ray player and that's it. You won't notice any difference, and the manufacturers will probably drop the appelation, and just call them players, or media players, or disc players seeing as they play CDs as well.