Downloadable media would be awesome, but I have to agree with Abnormal Freak that most people just don't have good enough internet connections for this to be effective.For now, we'll just have to make do with monster discs like this 16-layer one.
But I have a question: what the heck would game developers do with that massive amount of space? I mean, you could get better graphics for one thing, but you couldn't just make longer games. The potential game-time you could have would probably be too long to keep people's interest intact. Yet games which don't end up being that long would end up wasting all that space.
Also, let's not forget that developers will require very, very long development times to make these games, so good games will be released farther and farther between.