Physical media will always be far superior to digital.
1) Can buy the game used. Instead of paying $60 for a game, you can wait a few weeks and get it for $35-40. Within a few months, it's available for $20-30 while Steam still sells it for $60.
2) It can be resold. After you spend 10 hours finishing that game, you can turn it around and resell it for 80% of its buying price. You can then apply that money towards #1 and buy another game for cheap.
3) You're not stuck with it. How many games, honestly, do you still play after a year? Maybe one or two. Why be permanently stuck with a game that you'll never play again? And why be stuck with a game that sucks? How about those poor saps that paid $60 for Terminator Salvation, discovered the game could be beaten in 5 hours, and had absolutely no replay value?
4) You can trade games. The ultimate barter. Tired of a game and need a break? Trade with a friend for a month. Want to see if a game is really fun? Borrow it from a friend. Downloadable demos do not compare.
5) A visual reminder. Having a physical boxed item is a visual reminder that you have a game that you can play. I compare this to the Humble Games bundle I bought a few weeks back. I honestly keep forgetting that I have these games to play, since they're just icons on my desktop along with dozens of others. It's different than being bored and walking to a bookcase to view through a physical collection.