Fantastic points! We both agree that the industry leader for gaming digital distribution is Valve and Steam.
1. Bandwidth - Not having an alternate way, any way to get games to consumers without downloading is a missed opportunity. My suggestion is that at checkout on Steam, you can select to pay a few dollars more and wait an additions few days for the physical media to be created and mailed to your address. To minimize any problems, the activation code could be recieved at the time of purchase and required when the software is installed upon delivery, or make the games default to off-line mode. Valve and the developer could realize lower operating costs by reduced bandwidth usage for a segment of their clientele that currently has no demographic. Let's face it - the Steam model revolves around POS and download, not POS and mail. I'm sure the DVD+mailer packaging that Netflix uses could provide some evidence that costs per unit, offset with an additional handling fee, would benefit everyone else that chooses to download their content. The only valid reason I can think of that this wouldn't be permissable is when ordering a physical copy of a game through Steam conflicts with a retail version of the same game manufactured through another distributor. In that case, the developer needs to provide for this contingency and package the game with other materials upto and including other content to create a new SKU or package. Allowing the archival copy (as mentioned in #2 below) is essentially creating a physical copy of the same game that can be puurchased at retail, only you need the Steam frontend and authentication process to access it.
2. Archival Copy - I know that Steam allows the user to burn the game to physical media, but I've never done it so I don't know exactly how it plays out. Granting the end user the ability to burn one archival copy, with the record of fact maintained by Steam, should be permitted. That means that weather the consumer chose to order the physical copy (as I suggested in #1 above) or download it and burn it themselves, the integrity of the game and the system remains intact and the customer gets several ways to store the content.
3. I believe in economies of scale and supply and demand. If Steam is releasing a new game that cost a lot to make and promote, they should be allowed to ask a lot for it. Historically, Valve and the developers have been good about utilizing pre-order promotions, pre-sequel price drops and post-release discounts to encourage sales spikes. Generally though, these are targeted for gamers that are early adopers or those that are willing to wait until the marketing hype cools down. I guess it comes down to what the consumer feel is a good value, getting a AAA title on release day or waiting until it's aged.
Interestingly, I bought the retail GOTY edition of Oblivion from Wal Mart for $19.99 and it (at the time) was on sale on Steam for the same price. I'd much rather enter my retail codes on Steam, pay a few dollars to Valve and Bethesda (who are already Steam partners) and let lifetime upgrades and patches on my retail version so I don't have to worry about it anymore. In this Oblivion example, to the best of my knowledge all respective parties are represented so there's no reason why I can't grandfather in my retail game (for a fee) and get Steam support that includes authentication. Then in the event that I lose my retail physical media, I can pay again a handling fee and have the Steam version mailed to me.
To opt out of the download and usage of bandwidth should be a noticable savings to Valve, but as I indicated I'd be glad to pay additional for that option and have either/or content insurance for life.