This is a loaded question if there were ever a loaded question. This has been discussed many times before. There is no consise answer. No particular method has been proven to be beter, and with some of the discussions about dvd decay, it has defanatlly been discussed to extent.
You are not crazy. Many people are interested in the best way to store dvd's. I'll tell you a little of what I have heard, and hopfully others will add info to get a complete picture.
First, store them verticle or horizontal???? Vhs tapes that are layed on thier side, will actually get damaged from the weight of the tape. I have had expensive vcr's that would record index marks on the very edge of the tape, and storing them on the side would kill these index marks kind of fast. In therory, storing vhs tapes on the side would only kill the mono tracks first, but it will eventually kill the hifi tracks as well as the video. the tape will curl under it's own weight, it has been proven to happen.
I think that most of the you have to store it verticle is a throw back to this. Just like burning at slower speeds is a throwback to cd. people assume that the slower you burn a dvd, the beter (cause cd's are that way), but it is flat out false for dvd.
The only realistic reasoning that I have heard is that stored verticle, they are less liklly to get condensation, compared to storing them horizontal. Maybe it depends on how they are stored and the humidity. I question if storing them flat will cause problems unless you are in a very humid climate. It is a fact that humidity will effect the logevity of dvd's, so draw your own conclustion there.
I gotta do something, but will give more therorys in a bit, and I hope others will too (this could be an interesting thread if wee all present what we have heard, what we know to be true, and our therorys).....