It's amazing how many people fail to understand that USB flash drives are quite expensive compared to DL-DVDs. There's so much more hardware required for a flash drive versus an optical disc because the optical disc doesn't have to provide its own mechanism to read its contents. If DVDs or Blu-rays had to come with their own little USB based optical drives to read them, then you'd have a point, but that's not reality.
Optical discs are very cheaply manufactured because they're mostly clear plastic with a thin metal layer. They don't need complex hardware to read themselves because they get read by the optical drive. Flash drives are never going to be cheaper. McFly, is this not sinking in?
The only way solid-state could become cheaper than DVD is if the memory chips were to get much more miniaturized and then that miniaturized chip package could be inserted into a USB dongle - a flash drive with removable flash if you will. Unless and until that happens, you guys clamoring for flash drive only physical distribution will continue to be disappointed. It would be more likely that Apple would end physical distribution of the OS altogether before you'd see a switch over to widespread flash drive distribution.