For the non-technical average consumer (especially those over 40 at this point) I can see the appeal of physical media. You can look at it at the store, buy it, and put it in your player at home. As long as you take reasonably good care of it a DVD or BD will theoretically outlive the consumer. Downloads are harder to deal with for the non-technical, because you can't see or touch them, and they only exist inside the device you have chosen to put them in. What happens if the device breaks, or is lost or stolen? What happens if you buy a new device? Can you transfer the files from one to another? With a DVD you can always take your movie and put it in a new player and it will play.
The movie industry likes physical media too because it is something they can sell and keep track of more or less. Downloads, not so much. Many have also discovered "free" downloads through bittorrent and other file sharing methods. The move industry REALLY hates that. There may always be a place for physical media, but what happened to music very quickly is happening to video very slowly. Sure you can still buy CDs, and you will probably still see them in stores 10-15 years from now. Just like Napster, followed by iTunes, changed the music distribution model, so Bittorrent, Netflix, and Uncrate will do for movies. It is inevitable IMHO.
As for myself, I prefer physical media because they are easier. Yes, I am also in that over-40 crowd.
I also have basic DSL with no plans to upgrade. Just gave up dial-up about 2 years ago.