After E3, with the huge backlash against the Xbox One policies, Microsoft was debating on removing the Blu-ray disc drive and going fully digital. I am unsure why they would even consider that considering the issues people had were because of the focus on the digital media and always on connections (which would be more of an issue with no disc drive).
As much as I was against the idea, I think now would be a great time to start transitioning into a digital distribution system. Give incentives for digital releases – lower prices than physical media, exclusive in game items, maybe an earlier release date (1-2 weeks before physical is released). Get people interested in the new distribution system and show that it is as good as promised. Once you get people hooked, then the next system release could be all digital and people won’t have as much of an issue with it. Very similar to Steam. When it was launched, it was not as popular and had a lot of controversy (similar to the Xbox E3 issues) – what happens when servers are down? Offline mode? Do you really ‘own’ the games? Now, Steam is absolutely amazing and doing great. A lot of people haven’t bought physical media for a long time (Steam sales have nothing to do with that, though… Right? 
).
I prefer physical media. But, throw a discount or a freebie in there to entice me and I give that up fairly quick. Right now? The only thing the digital copy gets me is a download to a single machine, no disc to share or put on the shelf. Same price. What will I choose? Physical.
Bandwidth? Sure, that can be an issue. Hence the physical copy. You’re not locking out customers at all. Download caps with digital downloads? That’s something customers need to complain to their ISP about.