These are all valid assumptions... But flat out wrong. The fact is that DVD is still around for the same reason VHS lasted for so long. It's the low end of the market. People who can't afford to upgrade to streaming media for one reason or another.
These people make up a large percentage of the market. Much larger than the segments most of us fall into. Also a much larger segment than so called "cable cutters." These people never had cables to cut in the first place. They watch TV OTA and have game consoles two generations or more behind the latest and greatest. The odds of them having a computer less than 8 years old are next to nil. Certainly no tablets. Maybe a contract smartphone or two in the family, but they can't afford the bandwidth to stream video.
These families buy cheap $25 DVD players or used higher end models. Some times they impulse buy bargain bin DVDs at Walmart or target, but the sad reality is that most of them can't even afford that. This is why Red Box and other equivalents are so huge.
Now people are going to jump right in and say that devices that can stream off the Internet are cheap. This is true, but bandwidth is NOT. Decent computers to host a large media collection locally aren't any laughing matter either. Most of these families can't afford high speed Internet, let alone mobile devices with their even more prohibitive bandwidth pricing.