No physical media = you don't own it. They would have restrictions limiting usage, PSP Go anyone? I will not buy any console without games on physical media. Its just another way for them to control/monitor/and pimp you to the advertising whores.
Just imagine, your playing your favorite game. You get to a save point, and bam a commercial for Pepsi. Game continues, reach a cut scene and another commercial. This is the type of $hit that will come with this type of console. They will probably say commercializing the games will allow them to sell them to you cheaper. We all know allow and going to are not the same.
Just like TV used to be free, paid by commercials. Now you pay & still get the commercials. Don't think for a second that the advertising business don't want to invade your games more than they have already