I am ready to ditch disks and have all games be downloadable, but from a custimary viewpoint I realize it can never happen. While it probably takes less time to download a game than go to the store, and it also makes it easier to make a gigantic game world, it does leave some problems.
Marketing: Box art and such is important to attract people who want to buy games. Some might even buy a game as a spontanious decision. However, if you have a banner saying "download this game today" then many people will have forgotten it by the time they get home. Online adverticing might work though...
Price on consoles: If a console has to save all the data on how a game is played, it requires a massive memory, making the consoles a lot more expensive and thus less appealing to newcomers.
Fewer jobs: Hey, someone is payed to sell those games, right?
But the biggest problem is that so many gamers like the box art and having a physical copy (just look at this thread), so while I hope we will see more downloadable games in the future, they aren't likely to become dominant anytime soon.