I have bad news for you major proponents of downloadable media: Until the people who are... say, no older than 30 now (that's just a rough estimate) are middle-aged and people who grew up before computers became commonplace in a household have either fully embraced technology or died out, optical media isn't going anywhere.
People that are currently in their teens, twenties, and I'll give it up to early thirties, are more used to a digital lifestyle than people in their forties, fifties, sixties, etc. I certainly know that most of the people I know that just use computers for e-mail and maybe Youtube don't know how to download a movie off of iTunes. Even though it's easy, they wouldn't be willing to learn.
Advancements in technology give older people who are used to doing things certain ways a feeling of uselessness, which makes them not want to adopt these new technologies.
Now, allow me to say this: I have downloaded a few movies, TONS of music, and a few other goodies off of iTunes, and I have been known to use Steam, so I'm by no means an opponent of digital distribution. I personally think it's great, but it just won't become the social norm for, say, watching a movie on your big screen TV until people who are accustomed to technology are the primary consumers of society.
On a side note, I just like having the hard copy. I can't exactly explain it; I only use my actual CDs instead of my iPod when at home. Something just feels fun about having a collection.
I think things like Slingbox and AppleTV are great leaps and bounds in the right direction for home media, but I daresay that I know only a few people older than in their early 20s with the technology know-how to operate such things.
Technophobia is holding back our society (not just in entertainment, in stuff like medicine, enterprise, and such too). It's sad, but it's true.