From the point of a lowly PC gamer, I think that Carmack is (Sadly) right.
I don't think it's digital distribution that's doing it, though, I believe retail is killing itself. I rarely buy games and things from stores now because it's too expensive. I bought a wired 360 controller for my PC yesterday, and it cost me £25 (Yes, I know I could have gone online and got one for a bit cheaper). I bought the recent Wolfenstein too, but only 'cos it was 99p. But I can go into HMV and Batman: Arkham Asylum is £35, go to Game and Force Unleashed 2 is a mind boggling £40. But it's also a case of retail stores reduced the size of the PC department, and as such there's a tiny selection, usually comprised of new releases or overpriced older games. Unless you want, say, Starcraft 2 or Black Ops, you're lucky to find the game you want these days. Retail is falling behind because it lets itself. It doesn't do anything to stop it. I think that retail needs to get its act together and combat the digital era if it's to stay in business.
And on the "flip side", why does digital win? Games rarely, if ever, go out of stock, there's a bigger choice, pricing is more fluid (And often more "fair" due to that) and you often only have a short wait until you can play your game. I think it's great for indie games and smaller companies, but it's really bad for the bigger players - at least with regards to the PC.