I don't shy away from the fact that I am not a fan of download games (being why I will never get a PSP Go), and this article only adds to my determination to stick with retail games almost exclusively: 
 
  Official: DSiWare Purchases Cannot Be Transferred to a New Console  (link to original article)   

Nintendo of Australia reveal DSiWare policy

A common question we get asked here at Nintendo Life (and especially since the new DSi colours were announced) reads something like this:

"If someone were to buy a different coloured DSi, can DSiWare purchases be taken from the original DSi and transferred to the new one?"

Well we did a bit of digging for you, and talking to the kind folks over at Nintendo of Australia, found out that the official policy on transferring purchases made on a DSi console.

Basically, you can't.

Any purchases made cannot be transferred to a new console, even if it looks prettier.

There are exceptions to the rule - they are more than happy to transfer those purchases if the original console is in an unplayable condition. They have special kits that enable them to find out what has been downloaded to the DSi without having to turn the system on. They also said that in order for them to transfer from one to another, they need both consoles in their possession.

Hell yea that's annoying. You should have a right to use what you purchased as many times as you liked. The reason they did that was to prevent kids from buying a game and then re-downloading it on all of their friends DS's. So I can kind of agree with what they're doing.
 
However, what Steam is doing is the ideal way to do digital distribution. The PS3 is also pretty good as you're able to download purchased titles on more than one machine up to 7 times.

" Hell yea that's annoying. You should have a right to use what you purchased as many times as you liked. The reason they did that was to prevent kids from buying a game and then re-downloading it on all of their friends DS's. So I can kind of agree with what they're doing. However, what Steam is doing is the ideal way to do digital distribution. The PS3 is also pretty good as you're able to download purchased titles on more than one machine up to 7 times. "

I've downloaded quite a few games for the Xbox Live Arcade in the past year but the downloadable format isn't something that I'm too proud of. Where possible I'll go out to buy old games for their original consoles instead of on the Virtual Console or whatever, for the reasons you've already given and the fact that it feels better for me to have a hard copy in my collection. It irks me that I don't have a case or at least hard copy in cartridge or disc form for games like Braid, Megaman 9, Portal... even if I'm able to transfer them to the Xbox 720 or whatever, it doesn't feel so good since the game isn't truly in my own hands.
 
I definitely hope that services like Steam don't become the standard for full console titles and everything. Digital distribution is cool for those who like to get their games quickly without having to scour several stores or whatever, but it shouldn't be forced on everyone.

physical copy for the wins

You say "This is why I don't download games and I never will," but what if they changed this rule for the next generation of handhelds or consoles? Would you buy downloadable games then? (Personally I'm with you, but for different reasons).

They need to implement a service that keeps your game account on an external server. You can download games on your machine, but if you want to play them on a friend's system or a new machine, you just log in again and re download. If you log back in to your own machine, it expires your log in ticket a friend's machine, making anything you downloaded inaccessible unless you log in again.

I like physically owning games too, but I wouldn't just give them away or sell them if they are/were good games. The game developers need to make money, which selling games back / trading them / whatever, does not help in the slightest. By selling it, you basically didn't pay for it at the end of the road. Talk to most game developers and they'll tell you that they hate Gamestop for basically making money off their games. When all this stuff starts becoming just Digital copies of games, Gamestop goes bye-bye. And Developers make more money, and therefore make more or better games.
 
 
So yes I'm all for digital copies of games but this shit seriously needs to be ACCOUNT BASED(like Steam). The games being tied to the console is really dumb as the OP shows. Wtf Nintendo...

" You say "This is why I don't download games and I never will," but what if they changed this rule for the next generation of handhelds or consoles? Would you buy downloadable games then? (Personally I'm with you, but for different reasons). "

For what it's worth, this is a problem limited to DS & to a certain extent Wii.
 
Even on 360, PS3, and PC it's a scary prospect to lose all your purchases.  I have lost things I bought on the EA Store on PC...

Physical copy reigns supreme

The thing with download games, is that it lets you try games, that wouldn't get published on disc. For example Braid, which I thought was a great game, and I tried it because it was a download game. Kinda tired atm, so sorry if it doesn't make any sense =P but download games gives you the opportunity to try different, small and creative games, that you normally wouldn't. Death Spank is a example too, or 'Splosion Man, or Trine etc etc

This is more of a Nintendo problem then anything. Downloaded games work find on Steam and XBL. Saves a ton of physical space. I own a lot of physical copies of games but it truly is a waste of space. If I could slap them all on a 1 TB HDD and be done with it I would.

" The thing with download games, is that it lets you try games, that wouldn't get published on disc. For example Braid, which I thought was a great game, and I tried it because it was a download game. Kinda tired atm, so sorry if it doesn't make any sense =P but download games gives you the opportunity to try different, small and creative games, that you normally wouldn't. Death Spank is a example too, or 'Splosion Man, or Trine etc etc "

I agree, and I would much prefer that "Risky's Revenge" was released in cartridge form. Unfortunately, Wayforward probably wouldn't be able to release the game in stores, so I'll take it where I can get it.