We already can when we install and play digital copies of games. I suppose the argument to keep discs are for people that can't download a 100GB game over the internet, or that they don't even have internet in some areas of the world. Having said that, what areas of the world can afford to buy/own consoles and TVs and houses to play them in without an Internet line. I suspect still quite a few places but...should we care? Should we limit progression to be more inclusive worldwide?
Having discs for console manufactures means they have more points of sale in shops so there is that in terms of advertising and awareness bringing more profits but....most people buy online anyway even if it is a disc, so why then not digital?
Space is an issue on hard disks still, despite storage being cheap. Games are huge, and we prefer SSDs for load times which are still costly, although even mechanical HDDs are still faster than reading off of the bluray discs surely, not to mention less taxing on the console with less to go wrong. Also less noise.
The thing that is still frustrating is when the digital version of a game costs £20 more than the disc version. Why!?
EDIT: discs are good for second hand market when recouping money spent on your purchases, but surely the console manufacturers don't care about that.