in theory it is possible but you would need to make sure that the wires and switchs are able to transfer the required data at the required speed. the format the data is stored would need to be suitable for what ever players you have. But it can be close to BD levels.
there is then the issue of copying DRM protected data.
Yup, you can stream BR level content. But you'll need to be careful ...
1. Use wired ethernet if at all possible - gigabit will give multiple streams, but 100mbps will do nicely for one room / tv at a time
2. Bluray over wifi is possible (despite what you often read), but you'll need decent kit - 802.11g is out, you need MIMO 802.11n (300mbps+). We happily stream BR over Wifi to the XBMC box in the kitchen, but had problems with the inbuilt wifi (despite it being 802.11n). I now use a dual band Buffalo Wifi bridge that keeps a solid connection to the access point two rooms away.
3. Band - if your house is detached/well spaced, 2.4GHz is fine and handy for range, if you live in a flat / terrace you'll probably need to look at 5GHz kit to avoid the baby monitors. Quality matters.
From my experience, you need a constant 8-9 megabytes per second throughput for clean BR - that's about 80mbps (meaning over 150mbps with overhead). Kit varies a lot - my dual band Apple Airport extreme from a few years back managed that easily - the last one I had (modern simultaneous dual band) was hopeless. Most good laptops wil throw 6-7 megabytes a second over Wifi ... mine normally tops out at 12-16 megs but I sat in bed last night copying at 27-28 megabytes a second from a Cisco E4200 in the room below to my HP (Intel 6300 extreme card). Normally only top-end corporate kit has these types of adapters and the necessary aerials.