There are some very big reasons to sell physical games when the internet exists: retail games are huge downloads and are only going to get bigger, which is going to require even more hard drive space then what current consoles are offering. I mean, we are talking about massive games upwards of 20 to as much as 50 gigs for some of these retail titles. PS3 already has games of this size. Uncharted 3 is so massive I couldn't even fit it on my hard drive along with the other PS3 games I wanted to download, and I have a 160 gig drive! Now imagine a console generation where blu ray is the standard across all gaming platforms and games the size of Uncharted 3 become the norm....even that 500 gig hard drive the One is sporting is going to start to look tiny.
And then there is the simple fact that many people don't even have the download speed for these games! Why is it that so many of these industry proffesionals live in a bubble where all of their customers have access to high speed internet?
This really is not something people can use to justify physical media. Back in the day when people were download GB from torrent sites, and it took a day for the download to happen, millions of people still did it. The only thing diffrerent here is that if your net speed is slow you will make a purchase and have it the next day. Its not like people purchase a bunch of games at once. Also on another tip for preorders just like steam, the games can be preloaded so you have it on release day.