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In addition to the data speed problems people have mentioned here I'd also like to point out the size of those games: A lot of games will be 50GB in size next gen so even if the consoles come with a 500GB hard drive you could only store 10 games on it. You'd have to get a 1TB HDD at least and those are still quite expensive in relation to the overall price of a console.

I doubt physical copies of big games will disappear - not next generation and not next-next gen either. Our data speeds will increase but so will the size of big games. Coexistence of physical media and digital downloads is the way to go.