Digital Distribution on console systems will likely not take off for quite some time. It's alive and well and WELCOME in the PC world, however, especially through something like Steam where it stores what games you have in an account, so even if you take it off your computer to free up space, you can download it again at a later date.
I also think the price thing needs to be addressed. Games come in all sorts of shapes and sizes. I would think prices should reflect that. If more games that were shorter in length were $20, more people would buy into it, I think. I agree that things like Heavenly Sword are simply not worth the $60 price tag when you can pick up something like Mass Effect for the same price. (I realize they are on different systems so that's not a perfect example, but I can't think of anything worthwhile on the PS3 that's system exclusive, and that's entirely beside the point anyway.)
I also think games are getting too long anymore, especially considering how the really long ones fail to engage people for ridiculous amounts of time. Prime example: anything by Squaresoft in the past 7 years. I own FF12, but only because I dislike trading in games especially when I'm not going to get very much back. It's simply too long and it does what most JRPGs do, which is to say not give you any of your FUN abilities for an extremely long time. The intro is so incredibly boring as all you can do is whack things with a sword and use items.
The last game I played that was over 20 hours in length I actually finished was Tales of the Abyss, which is kind of funny because my final save had some 80+ hours on it and I beat the game AGAIN with the new game+ feature (so I have about 120 hours total with it). Why did I spend so long on one game, a guy like me who's attention span isn't exactly the greatest? Simply put, awesome gameplay. The combat for me is so in-depth and engaging, I could have cared less about the sub-par translation effort (although the voice acting was superb!). Give me a game that long with a menu system with something as boring as "Fight/Magic/Item" and I'll burn out in about 5 hours if the story doesn't grab me.
I have to say I'm with Johnny on this one. Give me something I can complete and get enthralled with, even if it's short, and I'll love you forever. If you're able to make it long, all the better, but quality will always beat quantity.