I dont play on console, but I'm going to throw my 2 bits in.
...isn't this a good thing? Wouldn't this mean you don't have to find the disc every time you wanted to play a game, and you can just play right off your console? If the disc gets scratched then you don't have to worry, its on your HDD! Also, getting another console to replace your old one doesn't sound like it would happen to often (thats just me though), so I don't see that as a real issue...
Also, (I'm not 100% on this), wouldn't game loading and overall speed be faster since its off the HDD and not off a disc?
Don't you want faster loading times...and not having to worry about a disc to play..? Isn't that one of the reasons why steam is so popular?
Well...to be fair...this would avoid that thing...called...piracy...
Since games are installed to the HDD, it now has the same problem as a PC would, you can buy a game, install it, then give it to your friend then he can install it and now there are 2 versions when you only paid for one.