I'm a PC gamer and digital distribution is now the consumer model for PC Gaming. Unofficially, but the corporate suits can go fuck themselves up the ass because retail tells only a fraction of the story.
Your arguments really drive home the sorry state that retail has become in lieu of the war waged by publishers and retailers. Fortunately this model will die out and I hope that digital distribution follows the example set by Steam. It will be interesting to see whether or not the next console generation will be able to adequately take advantage of digital distribution and in a way that provides optimum value for customers and profit-turnover for publishers and developers (mainly developers).
I also have to wonder how Cloud Gaming will impact on the industry, as its model is becoming more and more popular and I see this as another retail killer. Cloud Gaming could possibly be the shape of things to come.
Another point worthy of note is that law-making in regards to the business of computer gaming is a largely untested area and more needs to be done to address the sheer Fuckery (with a capital fucking 'F') that the publishers are putting customers through these days. There simply has not been enough legal scrutiny of the industry outside of ideological-driven politicking of pseudo humanitarians, who only care about their political agendas and not so much about the amorphous 'the children' descriptor.
I would predict, that if there were to be another VG industry crash, it would be in large part due to publishers chocking the industry through its consumer policies.
*Edit*
What I would really like to see in terms of distribution models, is one where developers launch their titles from their own server network. I believe Frictional did this with Amnesia, by having the game downloadable from their main site. It was also on Steam, but I think it highlights quite a bit more flexibility than traditional publishing models.