Many free programs (Media Player Classic is another) can play Bluray content right off of the disk, what they can't do is circumvent the lovely DRM the industry is incessantly cramming down their paying customers' throats. Movies are like games or other software. when you buy the disk, you don't actually own the movie. Only the right to watch it. Recently, this has gone so far legally as to almost prevent a media owner from even legally backing up his/her movie: I think you are technically allowed to make a single backup, as long as you don't touch what you've ripped OR circumvent the DRM (yes, I think there is actually legislation stating that paying customers can't legally circumvent DRM to make backups). This means re-encoding said streams and packaging them in convenient containers for playback (eg, mkv) is illegal, even if you own the disk. This also means that reducing bitrate/resolution for playback on mobile devices is also illegal.
I know this has been stated numerous times in numerous places before, but with all this incessant DRM and continual firmware updates required even for hardware players to often playback, even in the crippled format the studios let you view the content (mandatory previews, menus, etc) it's like the industry is purposefully sabotaging the BluRay format. The irony, of course, being that this DRM has never stopped would be pirates for long, and probably never will.