I really have a hard time seeing people choosing DD over the optical format which they can:
- Bring to a friend's house and play
- Lend it to a friend
- Exchange it with a friend for another game
- Buy as a gift
- Sell it/Trade it in to get some of their money back
For me personally, if the disc game is $60, DD version needs to be $30 or less to make up for its disadvantages, or I'll buy the disc version every time, not to mention that I never pay $60 for a brand new game on release day, it's between $50-$55 thanks to online retailers. DD hasn't been proven to work for expensive stuff such as full-price games. It works for $1 songs and $10 arcade games, but anything more than that and people gravitate towards tangible, physical products with resale value.
You're describing a younger gamer ... who buys at full price exclusively?
My game purchasing habits have certainly changed this gen. I now buy most games a few months after launch for cheap (15~30€ range w/ shipping). When I feel I no longer will play them, I sell them off, usually at around a 5~15€ loss.
The thing is, selling used games is a bit of a hassle. I'd be willing to part with let's say 3 or 4€ a pop to not have to stand ready all week, ready to prepare the labels and drive down to the post office (I send recorded letters exclusively). It works out that in some cases a 15€ game (w/o shipping fees) that I will never be able to sell back is the same effective "cost" to me as if I could.
Some games you just can't sell, even if you want to. R-Type Tactics, great game, don't get me wrong, but you can't sell it for even 3.89€. If you go lower, between Amazon fees, shipping fees, buying envelopes and gasoline, you're starting to pay extra, "recovering" a negative amount of money with your resale. The cheapest way to get it out of the house is to throw it in the trash, but I just can't bring myself to do it.
You can see how download versions get more and more attractive the lower the entry price goes. I wouldn't want to sit on 35€ of lost resale value for a recent blockbuster game I'm 100% done with. But there's a price threshold, and this is surely individual and subjective, where the physical copy stops making sense.
In practice I try to buy PSP games on PSN when they're 15$ or lower (I shop on the US PSN) as long as there's free space on my memory stick. UMDs I only buy for games not available on PSN, or if the price difference gets too big (>=20$).
I'd probably do the same for PS3 games, but they aren't available that way. I did buy Burnout Paradise as a PSN download (for 20$), and it was a great decision to do that.