Respectfully disagree. The allure of Steam is that I can buy a game, install it immediately without having to drive anywhere, and then I have it without having to worry about keeping a DVD in the drive, scratching a disc, or having game boxes laying around. If I get sick of the game, I can uninstall it, and install it again 1, 2, 5 years later down the road if I want to play it again.
I bought Half Life when it came out in 1998. I haven't had the physical media for it since who knows when, but if I want to play it today:
It's one click away, for a game that I bought 12 years ago. Digital distribution is awesome. Less waste, less boxes, less shit laying around. I love the XBox arcade, and wish that I could get new games from it on release day. I buy something, install it, play it until I'm sick of it, and then remove it knowing that 3 years from now if I want to play, for example, Mass Effect 1 again, I just install it again and I'm good to go.
It's not like you get customer service buying games at shops. You get a kid making $8/hour behind the counter whose job is to ring you up, and read Game Informer once in a while so that he can tell you what's coming out. It's no different than buying a gallon of milk.
Every distributor/developer should go the downloadable route if you ask me. People will buy more, because they can get it then and there, and it's way better for the consumer because of the above reasons.
Hell, I bought EZDrummer's digital DL off of Toontrack, and was using it 30 minutes later. That's a lot cooler than going on Amazon, waiting for shipping, and having to make sure the DVD is around and doesn't get a scratch on it.