I think there are a few problems with downloadable content ...
First off, its too expensive. I could be wrong but I suspect the typical publisher would see 4 times the interest in their downloadable content if it was half the price; and they might see similar gains if they cut their price in half again.
Secondly, few games are interesting enough to finish all the content that came with the game; and their effort should be put towards making a more complete initial experience rather than pushing downloadable content.
Finally, publishers are churning out sequels to many of the games that I might be interested in downloadable content at a rate where the downloadable content is easy to ignore. By the time I'm ready to revisit Mass Effect 2 I expect Mass Effect 3 will be released (as an example) so I have no motivation to buy content for Mass Effect 2; and I'm just about ready to revisit Fallout 3 and we have a new Fallout game releasing right away.
