A comment via The Verge on the IllumiRoom technology (via Like A Prayer):
Exactly. Download only consoles are at least 10 years off.
You need the entire thread for context, so definitely read that.
The problem with Download only in the near future is connectivity to the Internet at high speeds. We’re heading to a 3D/4K high-bandwidth required world. Without bandwidth speeds to match the breadth of content, few people would be able to simply download games in the range of a blurray disc (~20GB). So until you can download an entire blurray in the blink of an eye, you can’t have a download only console while maintaining the scope of quality, length and existing expectations.
(A few comments down, someone mentions the Ouya — well, sure, that’s “download only” but it’s not playing a $100 million dollar triple A title, either.)