I think DD can be good thing and successful, but the biggest obstacles it faces are price and DRM.
GOG.com has been the only service so far that i have seen that does no DRM the way DD should be. You can burn the install file to a DVD, put it in a jewel case and print a cover, and if the price is reasonable then that would most certainly be an acceptable substitute to an original print.
Their pricing model still needs some work though, ideally you would want Digital copies to cost 1/4th their physical copy counterparts as not only would the developer be saving a large amount of cost on shipping, packaging, printing, shelf space, middleman share, etc. the customer would be losing their resale value and all the sales would be first hand sales, so all profits would go to the developer that would have normally gone to the second hand market (which we all know is HUGE).
