While I do endorse the idea of all games being downloadable, I seriously hope that either physical copies are available or you have a way to make one once you download it.
I mean, there are lots of reasons:
-Who doesn't like showing off their massive cabinet full of games?
-What happens when you want to bring the game to your friend's place who has the same system? Tough beans?
I also think it'd be neat if, when you downloaded a game, you could burn it to a CD (just once) and go to their website and download the cover.
Basically, what I'm saying is that I hope it's like the current music industry--I can go buy a CD OR download it from online. Once I have it, I can do whatever I want with it--slap it on a memory card, put it in a dedicated player, put it in a game system, etc. I'd like to play my games from the disc, play it from my external memory, hard drive, solid state, whatever. I don't know how likely that is, but it'd be the best situation, in my opinion.