It's an interesting argument and I personally prefer electronic storage of my CD contents. But I wouldn't give up having media for backups unless the seller assured that I could redownload in the event of a drive crash. Finally there is the issue of bandwidth. I'm one of the lucky few with great gobs of bandwidth (35/35Mb FIOS), but a huge chunk of the US can't even get DSL much less afford high bandwidth connections. Verizon has stopped their FIOS expansion and AT&T refuses to get into the fiber to the home business. And cable companies aren't going to put up with customers downloading Netflix much longer. Not when they can force you into their pay per view. And that's just the US (
carrier pigeons). If this were Korea where you can get 100Mb anywhere I'd say the DVD was in danger. But not just yet. So far I have not been impressed with Netflix's (720P w/2ch audio) online offerings but I guess I'm a picky audioholic. Wake me when it's uncompressed 1080P w/5.1 sound.
Bottom line I think DVDs (especially Blu-Ray) and CDs are the purchase/rental medium of choice for at least another 10 years. At least for me.