A Discless SKU could work reasonably well. More and more games are being bought digitally these days, and it's only a matter of time before consoles go pretty much all-digital (PC has already completed this transition).
The only way to make it work now though, is if it was sold alongside the current Blu-ray model, for a while at least. Maybe they could phase out the Blu-ray SKU later once sales decline below a certain point. But an immediate replacement of the disc version would cause quite a bit of backlash.
"Never argue with stupid people. They will drag you down to their level and then beat you with experience."
-Samuel Clemens