i suspect whats at odds are the ease of copying that digital storage provides, and that the users see every day, and the concept of shrink wrapped software (especially these days when one either have, or know someone that have, a connection that can allow one do download several gigs of data in a matter of hours or less).

the microsoft way made sense when distribution meant sneaker-net or similar (who was it that said something about the bandwidth of a beetle stuffed with tapes?), but its end is fortold by the net, just like similar ways for media.

the only way they can reverse that would be to put the os and software back on solid chips, but as console roms show, not even thats perfect.