Ultimately, it's an issue of convenience. Price considerations aside, would you rather buy your games:
1. By going to a shop, browsing through a limited range of titles, and fending off overzealous shop assistants.
2. Buying from an on-line retailer offering the full range of games, but waiting a couple of days for someone to leave a package under a bush in your front garden.
3. Buying from the comfort of your sofa and having the game ready to play in minutes. Not only that, but you'll get an even larger range of games including those from indie publishers who would be unable to finance a production run of physical media.
I'm pretty sure where I stand on the matter. I've got to ask whether a box on the shelf really matters that much to people? Maybe they could still sell the boxes for those who want them, with the added benefit that you'd never even need to take the shrink-wrap off?