There are so many reasons not to give up on physical media that I find the whole " get in line" inevitability of the whole thing disturbing. It cant happen unless consumers support it and we showed MS that when they announced the XBone and then triple backflipped.
The reasons digital games still suck compared to physical copies:
1, Price: digital versions of books, music and TV undercut physical prices by an order of magnitude to get their foothold, comparable digital games are like 10% cheaper tops and until they are in some subscription service for nothing they never go down in price. A month after a game comes out at retail the game has usually dropped by at least 10 bucks and usually more. Steam sales may be good but they aren't actually all that amazing. The last one kinda sucked and the sales prices for old games were still comparable to my local game store blow outs.
2, Fear of games becoming unplayable: servers get taken down all the time and some games are just plain unplayable due to this. But I can still boot up my SNES and play legend of Zelda or SF2. There is a feeling that these companies will shut off games we love in the not to distant future and we will be left with no collection at all.
3, Technological limitation: Most of the world still has shit internet, games are now fucking huge and streaming sucks ass...oh and some places (read a lot of places) have bandwidth caps.
Downloading a modern AAA game with ADSL or even ADSL 2 takes forever and can be a sizable investment of a person's monthly DL limit. when I buy a game from steam it doesn't just cost me the 15 bucks I paid for it also costs me my bandwidth and monthly DL amount, I only get 100 gigs a month for 60 bucks, most bigish games seem to come in at around 15-30 gigs so that 15 dollar game actually costs me more like $25 in real terms.
Again until these issues are sorted there is no reason to buy into this all digital future. Vote with you wallet and voice your opinion. We check MS last year and we can do it the next time asshole corporation tries this shit.