Nope, not going to happen anytime soon.
1. Size - Same reason we don't see digitally distributed movies being a major market - and much more so for games - they are growing in size, it is just much cheaper to have them on a physical medium. If someone had 40 games that were 25 Gigs, they would need a 1 TB hard drive just to store what they had, and that speaks nothing for the future or any additional storage requirements for anything else (saves, music, etc...).
2. Games make for even better gifts than movies do, and physical mediums are always a better gift than a digital one.
While I am sure digital distribution will continue to expand, I don't think it will ever replace physical distribution completely. The only way a digital distribution only situation will happen will be if games are no longer seen as valuable enough to give away as gifts - it happened to music - but the nature and price of games is somewhat higher than simple music distribution... And we all know how the music industry is now.
I describe myself as a little dose of toxic masculinity.
