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its a fun idea, but a lot of people like the physical media, having a download only device doesn't work (as demonstrated by Onlive and the PSP Go)

I can't see developers choosing to create games for this device, the way you propose the cash is distributed to developers effectively means that games like FIFA, Madden and CoD, would benefit most as they are "ever green", I don't often play a game more than one more time after I've completed it and I often go back to playing these evergreen titles as they are always fun and distracting, I can see games which only have single player getting really affected by this, as to compete with the time I play online, I'd have to intentionally go for getting all achievements/trophies for the system