There are three problems here. Microsoft overcharges customers for their content. They have no system in place for discard and reacquire. You need truly massive hard drives if you want to use them as high definition video libraries.
The music story is a completely different scenario then video. Downloads of music have incredible advantages among them. You do not have to buy an entire CD to get two or three songs you want. That means it is far cheaper. The removal of media makes listening to music far more convenient. Having a thousand songs on a MP3 player is incredibly convenient. None of these things apply to video formats.
Until Microsoft ensures the right to unlimited downloads of items you have purchased. Provides a compelling price point, and at some point actually provides a means to burning your download only material to a disc. The concept will never overtake physical media. Honestly I do not see the latter two ever happening out of Microsoft, but here is hoping they do get around to the first. That would make data management a little less harsh on consumers.
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