It didn't catch up to providing some form of online streaming until after being picked up by Dish in 2011 — long after competitors Netflix and Hulu had staked out significant market shares. And even that attempt didn't go very well.
The death of Blockbuster's remaining retail outlets is not a surprise to anyone. If anything, the surprise is that it has taken so long — the company was already down to 300 locations. And Dish intends to keep the Blockbuster on Demand streaming service afloat for the moment. But it seems unlikely that it will be able to seriously challenge Neftlix, the once upstart DVD-by-mail company now worth nearly $20 billion, any time soon.