As a concept, digital distribution – particularly of videogames – is a wonderful thing. It should, and sometimes does, reduce prices dramatically by cutting out the need for physical manufacture, stock inventory, distribution and retail middleman. (Which in turn can also make niche genres economically viable.)
It can be, and usually is, much more convenient too – there's no need to mess around with noisy, slow-loading discs or worry about getting them scratched or losing them if all your content is right there on an instantly-accessible hard drive.