Now with nearly everyone with high-enough speed internet access, such physical distribution of software is antiquated. And not a good business model.
It's a great business model. I quite like the nice printed books of artwork and stories I got with older games. Reading that stuff in a PDF is damn boring. Give me a dead tree, please (but remember to plant a replacement).
When you want to get groceries, do you drive around randomly looking for signs that say "grocery store" or do you go straight to the street address of the local H-E-B, Kroger, Publix, or whatever?
The same applies to web sites. When you want to order a laptop, you check the sites of businesses you know that sell laptops (Dell, HP, Amazon, NewEgg, Fry's), or you go to a shopping comparison site (which, guess what, has a brand name as their domain!).
Search engines have absolutely not reduced the importance of domain names.
3) It costs $10 more to get Internet access without also getting cable.
You're confused. It actually costs $30-$50 less to get internet access without also getting cable, because cable + internet is upwards of $90 after tax, while internet is under $60, even after the stupid "for the first 12 months" bullshit.