I like my games how I like my games. I like to play with a controller in my hands, and that's it.
And having superior hardware doesn't mean we'll continue to get the same games over and over, there are plenty of ways to innovate within the current hardware media.
Consider literature - the media of paper was the same for hundreds of years, and we continued to get new and original stories. With the recent development of ebooks, we got new hardware, but that doesn't affect the originality of stories. I'm OK with the concept of other hardware like the kinect or the move to accompany the hardware, but I don't want it to be the fulcrux of the system like motion controls are with the Wii. There's a place and time for things like that, just like there are a few movies I really want to watch in 3D - but most I don't.
I too support a fully digital age, where no content is physical, and I do think we'll get there eventually, but it won't be any time soon. Not enough people have broadband, and there's even a large population of those who do who want to "own" the disc. Not to mention Prof S' point about Gamestop...
But over time these feelings will change and enough people will have broadband and be willing to use it that the industry can essentially tell Gamestop "sorry." It would be in Gamestop's best interest to find a way to capitalize on the growing digital market early. There are already some sites out there that let you buy AND trade digital copies of PC games, and yeah, it's legal.
If Gamestop fails I think it will be because of a failure to innovate, not because the industry sold them out.