So much closed minded-ness in this thread. Someone has to come out and say it:
That's fine and all, but times change and so do people. The young ones coming up will be FAR more connected to one another and their content than even someone as young as I (23) will ever be. They will be the first generation to demand that every be accessable from any device... TV will go to on demand, movies are pretty much there, and gaming will follow suit. Now how can gaming be on demand when its just a physical disc?
It can't.
I use both the physical disc and D2D, GOG, STEAM, etc. I'm a smart shopper: I buy the game at the best price and regardless of format. I weigh the pros and cons. Having a digital copy at the "full price" doesn't show how much a rip off they are, but rather how so many people are suckered into thinking getting a box suddenly makes it worth $40, $50, $60, etc. Free/Cheap DVDs come in cases with artwork, etc. It costs then cents on the dollar to mass produce that crap. I would bet the costs of bandwidth (something necessary for dishing out large titles) would be somewhere along the same lines as making cases, albiet cheaper.
No one even mentioned the pros of digital distrubution: Green. Less wasting of useless paper, plastics, gas, etc. The energy cost of digital distribution IS much less then that of physical media. That's a very important key factor to myself as many nations are growing into the 1st World Scene and developing broad band networks. I would much rather not have them follow the pitiful and wasteful example of the current 1st World Nations, that's for sure.
With Steam and such, games are much more likely to go on sale quicker than their retail brethren. Less overheard, worrying about stock, etc. Hence there are the weekend deals on massive games like Dawn of War 2 for $25 or D2D with Fallout 3 for $25. I have never, EVER seen those go on sale at any brick and mortar in my area. If you can't find them cheaper online to justify your loss of $0.50 worth of plastic, then you just don't search hard enough.
Someone mentioned it was difficult to get your Steam account back and my response:
IT BETTER WELL BE!
If it was simple, then that would be an open gateway for social hacking; IE an imposter posing as you stealing your account. Be smart with online accounts: Use complex passwords, change them every so often, DO NOT SHARE THEM, and make sure your PC is properly clean. Simply put: They are very safe, it's usually almost always something the end user did to lose it, not STEAM, D2D, etc.
What some people also fail to realize is that nostalgia of whipping out an old copy is moot for someone who had their disc lost, stolen, or damaged. I never got to play Deus Ex, but instead of fishing on eBay or Amazon for a copy, I could click into my steam account, insert 10 credits and *Dispense!*
The Digital method is coming. It's succeeding on the iPhone, PC, Home Consoles, and even in handhelds. It will come to a point where are children or our grandchildren will look at our old PS2 collection (which is all offered on the PS6's online store) and be like "What's that for? What do you mean you can't access them anywhere?!"
I own 30+ games on Steam. I own 50+ physical games for PC, PS3, PSP, DS, PS2. I have lived in both worlds and can only wait for more digital adoption.
Finally: Don't be a Tool. Piracy never has an excuse.