I install my games to a separate partition, so I never need to re-install them if I format my OS partition. Even if the game doesn't work on the new OS (which is rare, but does happen), re-install takes a matter of seconds because most of the files are already there. Usually all that's missing are some registry entries or a system file or something.
So yes, if that saves me £5-10 that I can put towards another game, I'm happy to do that. It's not like Steam is fault-free; in fact, when I re-installed my OS earlier this year, Steam was one of the few things that kicked up a fuss and wouldn't initially work.
Don't get me wrong, people are free to do with their money as they wish. If they want to pay more for a game because they feel it's more convenient for them, that's fine. The point that always seems to become lost though, is that the people running these digital distribution platforms cannot be allowed to think that that supposed convenience means they're justified in keeping prices high. Otherwise, the situation I made earlier will happen; DD will take over and we'll all be paying more for our games than we used to. Can't imagine anyone would want that to happen (other than the people who profit from it, of course).