So games are hamstrung by DVD and Blu-ray is better. Sounds right to me.
Some games might be. Lots won't, even now. The 360 platform - and possibly the entire games industry - is better off for having had cheaper HD consoles available though.
Singling one aspect of the current consoles out as being a particular problem just seems like a bizarre thing to do. If I could upgrade one thing about the 360 it'd be the graphics chip well before the optical drive though.
Installs are just better. Seriously, great feature. Ever since my 360 cracked my copy of SSFIV, the less time my games spend spinning in that drive the better.
I like knowing whether my 360 can read the whole game disk. I've had a couple of games where disk reading has been an issue, both new games btw. It took several attempt to limp through one game (would have been unplayable from the disk) and another failed even given several attempts.
I don't want to get several hours into a game and hit a disk read error, too long after purchase to return the game.