I am almost 100% digital (and when I buy a physical copy I usually "upgrade" later when the game goes on sale for under $10.)
Here are the problems I have experienced/foresee:
1) Sony has really bad customer service and policies, especially if your account gets hijacked. I actually got banned from my PSN account (which I believe means locked out of digital purchases you have not yet downloaded) for a week a couple years ago because the following happened: 1) Sony double charged me for a game. 2) I called Sony customer support and they told me to dispute one of the charges with my credit card. 3) I did so, and Sony banned me from PSN. 4) I called Sony again and they said they would unban me if I bought a points card and paid the charge I disputed. I pointed out this had been a double charge from their system and they said it didn't matter, I still had to pay it if I wanted to be unbanned. So I caved and did what they asked (no point in losing hundreds in digital games over a $12 overcharge.) Now they did unban me, and they did actually eventually refund the double charge to my credit card, but the whole experience was pretty unnerving. I have also heard of cases where someone has hijacked an account and either run up a bunch of purchases or changed the "primary console" on the account to a different one, and Sony is bad about dealing with these, often making people eat hundreds in charges they clearly didn't make.
If you are going to go all digital you might not want to leave a credit card associated with your Sony account and you should have a secure, unique, password on your PSN account.
2) You don't know if the games will be forwards compatible or if the servers will stay up. Microsoft seems to have made a commitment to forwards compatibility with its digital games, but Sony hasn't even tried to bring PS3 digital games forward to the PS4, and they haven't said anything about PS4 games on the PS5. All that is fine if the PS4 servers stay up and you can re-download stuff as long as you have a PS4, but it may cause problems in the future if they decide to abandon the PS4 ecosystem when the PS5 comes out. The PS4 does not support external hard drives so if you have a large collection you won't be able to download the whole thing. It's an issue I'm currently foreseeing with my PS3 where I have a ton of games but can't get over a 1.5 gig hard drive in my PS3 (and PS3 games are blu-ray sized so 40-50 games could take up that much space, which is not that many when you consider all the PS+ stuff) so I'm not sure what I would do if Sony announced that the PSN servers for PS3 were going down. To their credit the PSP servers are still up (you can't access them from the PSP itself but you can use other devices to download them and transfer to PSP) but that doesn't mean that will be consistent. This is not a problem with Microsoft because it permits externals, and 360 games are much smaller anyway.
Those issues haven't kept me from going digital on PS4 (mostly because I don't have space for shelves of games, and there are a ton of great PS4 games that are digital only) but they are things to be aware of when making the decision.
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