The days of physical media are slowly but surely drawing to a close. Of the last 10 movies I rented, eight came from Amazon Instant Video and one from iTunes. There wasn't a shiny silver platter in sight.
That said, lots of folks have giant DVD libraries, and with good reason. DVDs are cheap. They work great in minivans that have DVD players. And, um, oh, what was that third one again? I can't...sorry. Oops.