With a small tweak, the latest VLC 2.0.x should be able to play most Blu-rays released before 2012 (it doesn't work for Blu-rays that use BD+).
So here's what you must do to get encrypted Blu-ray discs working with VLC 2.0.x in Ubuntu 12.04 Precise Pangolin.
Get encrypted Blu-ray discs to work with VLC in Ubuntu 12.04
1. Install the required packages
The N-muench VLC PPA provides some packages backported from Ubuntu 12.10 to Ubuntu 12.04, such as libbluray 0.2.2; you may get encrypted Blu-ray playback working with VLC under Ubuntu 12.04 without this PPA, but this has been tested using the N-muench VLC PPA (by Pinguy - I can't test this myself as I don't have any Blu-rays).
To add the PPA and install the required packages in Ubuntu 12.04, use the following commands:
sudo add-apt-repository ppa:n-muench/vlc sudo apt-get update sudo apt-get install vlc libaacs0 libbluray-bdj libbluray1
2. Now you must create an "aacs" folder in the hidden ".config" folder from your home directory and download the aacs keys there. To do this, run the following commands in a terminal:
mkdir -p ~/.config/aacs/ cd ~/.config/aacs/ && wget http://vlc-bluray.whoknowsmy.name/files/KEYDB.cfg
3. Now to play Blu-rays using VLC, open VLC, select Media > Open Disc, make sure "no disc menus" is selected (without this, VLC will crash for most Blu-ray discs) and browse for the Blu-ray disc.
The instructions above should work for other Linux distributions too, not just Ubuntu, as long as you have VLC 2.0.x installed along with libaacs0 and libbluray1.