I hate this push for download only. Its terrible for several reasons.
First I want my movies in full blu-ray quality and since a blu-ray is 50gb that's going to take a hell of a long time to download, plus I could see studios nickle-and-diming customers over extra features. Hard drives die and having to re-download everything would be a pain and it seems like a lot of ISP are capping your monthly downloads and going over that limit will cost big money. It would be awful if you could only download a few titles a month. I don't think older folks would be able to use downloads very easily either. My parents have trouble with dvd menus, there's no way they're going to know to download a movie, no matter how idiot proof they make it.
My personal biggest problem is that I live in an area without broadband and its highly unlikely we'll get broadband here anytime soon. My connection tops out at a whopping 2.8kb/s, which is barely fast enough to watch short YouTube clips, let alone a 2 hour HD movie so what do people like me do?. Not buy movies any more? Will we just have to wait for them to come on satellite before we can see them? Screw that! If that happens the studios can shove their movies up their ass. I'll stick with my dvds and blu-rays, thanks.
Doing away with physical media is a terrible idea. I really hope it never happens. I don't mind services like Netflix offering downloads as an alternative but a physical product should always be readily available, at least until fast internet is available everywhere, hard drives are more reliable and the ISPs start offering higher or even better unlimited internet access.