OK, believe it or not I'm the guy who asked the question in the panel.
And yeah there's a ton of ways this can go down but one of the ways I can see it happening, and I briefly mentioned this in the question, is the effect that a day-and-date release might have in the console space.
As in, right now people who want an Xbox 360 game day one have to go to the store to purchase a physical copy (along with all that entails, like hoping there is a copy there, catching shit from GameStop on whether you preordered it, etc.). People who want a PC game day one usually just have to buy it on Steam and wait for it to download/decrypt (and the downloading part can be done almost completely ahead of time)
So what happened to PC at retail? It really died away. I mean yeah there's still shelves at Walmart and Target but it's nowhere near as big. Go to GameStop and it's a pariah. And yet PC game sales are still strong enough to encourage ports and exclusive games and Valve's income doubles every year thanks to Steam.
So what would happen if 360 releases came out day-and-date on digital as well as physical? Would the stores rebel? And is fear of this what keeps this from happening?
In the PC space, when Microsoft decides not to make digital gaming convenience a priority, Valve takes up the slack with Steam. In the console space, when Microsoft decides not to make digital gaming convenience a priority, then there's nothing you can really do.
Anyway the gist of my theory was that the console makers can't go all-digital because the stores would kick them out (or they'd have to make the consoles not-cheap) but they can't afford long term to not go all-digital because eventually the public will demand it.
And then I think about things like the rumored Steam Box console, or how someone could, to some extent, just go ahead and do that today. I guess really long term your TV stops being a TV and just becomes a screen with a different form factor than a computer monitor, and the device you hook up to it may or may not be what we consider a "console" today, may not be made by the companies that make "consoles" today, and may not have the line-in-the-sand distinction between PC and console gaming (i.e., today if you buy GTA4 on the PS3, you can't play it on your PC - at some point if, say, Steam was a "console" you might be able to).