I fear this for the game industry just as I fear it with movies, music and books. I have a large DVD & blu-ray collection (my other collection hobby) and hate that these industries are trying to wean us off of physical media.
Digital delivery is convenient, but it wipes out the collector aspect, and doesn't allow you to buy used, loan out your stuff, sell things you no longer want, etc. With no used market and consumers entirely dependent on digital distribution, we're at the mercy of the game publishers and hollywood. We'll pay what the price is; no more looking for used copies or sales. We lose the ability to rip a disc to our computers to put on our mobile devices, stream to media centers, etc. We will only be able to view/play what is being offered (look at the holes in the Netflix/Hulu libraries for example).
I use Netflix for stuff I have no interest in owning, but I'm fighting digital distribution kicking and screaming every step of the way. Any future game consoles that prevent used games from working or go entirely digital will not get my money. We know that the WiiU will at the very least still be using disc-based media, so I may game on for at least one more generation.
The thing is, there are still hundreds of games I want to buy and play that exist now on current and past consoles. If I could never buy a new game again, I could live with that.