I think there will always be some demand for some sort of physical media, even if it's a package with a slipsheet and a USB dongle containing the file.

People like to give gifts, and physical packages are preferred for that, and some people do definitely like to be able to hold something tangible.

Perhaps it will become a minority market, but I am confident that some form of physical delivery of media (CDs, DVDs, USB dongles, flash cards, etc) will always exist for the same reason we haven't gone completely away from books, newspapers, and magazines.