all this digital dowload is all well and good if your internet service is fast, cheap, and has huge allowances...but in many places this is NOT the case, in Australia for example our plans are expensive and get no where near the allowance to make this the norm, Europe is some what the same.
The above is 1 thing that's limiting DD, the 2nd thing is convenience, essentially DRM has to be removed in order to make it work, otherwise the DRM associated issues will drive customers away.
A good way in a sense this could work, is the way some people have divx movies, yes they are illegal if they downloaded it and don't actually own the movie, but it's the whole concept that works so well that makes it convenient, you see once you download the movie your free to watch it on the computer, burn it to a dvd and watch it on divx compatible dvd players, put it on a portable hard drive play it on the PS3/360, and you can do practically the same things as you could with a normal DVD movie except that it's in a digital format, and essentially this is the freedom movie studios have to allow for it to work.
I'm not a fan of DD...mainly because DRM makes it feel like it's not actually mine, but if they were to allow bought digital movies to be treated like there illegal counter part, then there's no reason not to buy, and if this was eventually the case, then the real issue would simply be one of bandwidth...which with time will be slowly resolved.