What's a 5 1/2 Floppy? Pretty sure you either mean "3-1/2" or "5-1/4"... Amusingly though, the error nicely reinforces the main point of you're statement (that you're very young compared to him, and can't correctly remember floppy disk formats) :)

I was under the impression that the backbones where these routers are used was never the "bottleneck" for streaming video and such. Isn't the connection from each user's home to the ISP more the issue? I mean its great to triple the backbone bandwidth, but is it really accurate to say doing so is going to make it easier for the average user to download movies?

The scarcity arrises directly from the time it takes to acquire the items or gold. Real people (even if they are low-paid gold farmers in other countries) have to spend time getting those items to sell them to you. Your argument is akin to saying "The value of the US Dollar is arbitrary because its just little pieces of paper the government prints"

It has value because it takes time and effort to get it. If *you* could print money, it would have no value, just as if *you* could insert gold into Blizzard's database for your character, the services of the gold sellers would have no value to you either. But unless you are an accomplished counterfeiter or hacker, I suggest not implying that goods are worthless just because they are "virtual" without due consideration.