The reason why HDD doesn't replace DVD-ROM is because HDDs aren't portable and you don't go and buy an HDD, "burn" data to it, and then mail it to a friend. I have well over a terabyte of RAID storage on my home network, but it does me no good when I need to send 5gb to data to a friend.
Likewise, you're not going to see HDD's packaged in jewel cases for software at Best Buy.
HDD prices, no matter how low compared to packaged media, will never be a replacement for them.
Only broadband+HDD+widespread software delivery over network could replace packaged media.