Let's say that the picture quality in this case would be something like 300x200 pixels, 20 fps, with a variable number of frames per second, and perhaps 5-bit color. Sound quality is like something you'd hear in a call box (ie 32 kHz/8-bit).
If you digitize it at 720x480 pixels, 30 fps, 8-bit color, with sound at 48 kHz/16-bit, then you're capturing everything that can be captured. Then you save this as a digital file.
So all you're arguing about is what disc format the file is saved on. But the digital file above will look and sound exactly the same whether it's read from a DVD or a BD. It just will.