The article is quite convincing that Blockbuster is, in fact, dying, and movies and games by mail, along with downloadable and on-demand services are the wave of the future. However, I think the article missed two more failures of Blockbuster: Video games and its craptacular website.
As someone who flies through video games, and as someone who had two Blockbusters within two miles of me (one did close in October), the ability to rent video games from a store so close was key. However, as they years went by, Blockbuster was carrying fewer and fewer of the titles I came looking for (some of which were very big games), and they tended to get them in weeks after the games' release. Imagine if they did that with DVDs. It's just not acceptable.
I also find it unacceptable that the Blockbuster website is so poorly maintained that games released in June/July 2005 are listed as "New Releases".
So, while Epstein does write a fascinating article which is very convincing that Blockbuster is on its last legs due to such poor business decisions, I think an element missed by Epstein is Blockbuster's refusal to listen to the customer (which, by the way, is why we pulled Blockbuster ads from the site). We were all, merely, late-fees with legs to these people. Now, these legs are going elsewhere, and I think very few feel bad for the company.