You bring up a few valid points however. I never claimed any developer would go full download for sure, but I explained WHY they would want to do it if they could. There is certainly a demand from the Publisher side to further pursue downloadable distribution. It gives them a much higher turnover compared to regular distribution channels.
The fact that BioWare made over 1 Mio. dollars with the sale of DLC within a month of Dragon Age Onlines release shows just how willing people are to pay for digital content. Another fun fact (also from this article: http://www.gamestar.de/index.cfm?pid=675&pk=2318920 ) is that the average player of a F2P MMO spends 28 dollars a month on digital content. That's also why so many of the less-popular MMOs (LotRO, D&D Online, etc.) are all going Free2Play. They actually make a lot more money that way compared to the regular subscription model. So yes, people are prepared to pay a lot for digital content.
But you're also right when you say, most people, still like to "hold a product in their hands" when spending a significant amount of dollars on a game. And direct sale is still the way most full-price games are sold. Many people used the SC II and WoW digital download option, even-though its more expensive than the regular retail version (if preordered). Steam has been going for ages, although it's more than just a game-distribution software. But I'd agree with your sentiment that, unless there is a monetary advantage, I don't see digital distribution trumping regular sales anytime soon.
But it's only a matter of time, because the trend is there and has been for a while, the publishers want it, and many players are prepared to pay for purely digital content. The real question is if the remaining "conservative" players can converted. A new console technology that emphasized the benefits of such a system could help convert these players. Granted, it's a bit of a gamble but so is every innovation. If consoles really are expected to have a 10 year life-cycle, then pursuing digital distribution might be the right way to go. It's not really a matter of whether or not you like it.
Sony released their BluRay drive way before the Full-HD breakthrough. Hell, there weren't even movie BluRays at the time. But when you release a console, you always need to take the next 4 years into account. And looking back, the BluRay drive probably helped boost the PS3 sales by quite a bit, although it was the single most expensive component of the console.
But to be honest, your arguments seem to be based of the fact that you personally don't like digital download content. Guess what, neither do I. But you cannot deny that there are plenty of reasons for publishers to pursue it. And we customers will eventually follow track. And I'm not even sure how to react to the rest of you babbling. It doesn't make any logical sense. My PC is fine and I have no issues with it. But you cannot deny that the console limitations limit what game-designers build.
Just look at Final Fantasy 14. The PC version went fine, but they had to push back the PS3 version because they simply couldn't get it to work with the limited amount of memory available. And FF14 was already designed with the limited memory in mind. A game as expansive as WoW would never run on current consoles. Not only because of the contol issues, but because you can't really run WoW effectivly with 256/512 MB memory. Ever wondered why recent BioWare RPGs have such tunneled levels, compared to the vast open spaces of classic RPGs like Baldurs Gate? Because console memory can't handle more than a very limited amount of textures and NPCs in a confined area. At this time there is really no need to upgrade any PC hardware, nor will there be for the foreseeable future. Until the Next-Gen consoles are released, the hard-ware limitations of the PS3/XBox 360 will be what prevent multi-platform games of ever becoming too demanding.