Very good article. I think the video game publishers suffer from the "sales aren't big enough" syndrome that plagues the music industry. It's not that they aren't making money, it's that they aren't making enough. So we get statements like "Retail and used sales are bad, m'kay."
I love my Steam and my XBLA, but Microsoft charges me to download shit that is otherwise free if you have a PC. Plus, if you buy a digital copy on the XBLA and delete it, you have to re-buy it. Why do they do this? Because they can. That is why I hope retail never goes away. There aren't enough people willing to stand up and say "hey, that's not right, you shouldn't do that to your CUSTOMERS". Plus switching to digital only for the console market would simply give a monopoly to the console manufacturer. I mean, where else would you go to buy a digital copy of an XBOX game?
Come to think of it, that seems a bit anti-trust, doesn't it? I've heard that somewhere before...