Part of the problem is that in order for the digital distribution-only model to work, you either have to create the system itself or sign with an online publisher (Valve/Steam, Stardock/Impulse, IGN/D2D, etc) and tie your game to that particular service almost exclusively. It's more an antitrust concern than anything else, particularly in the case of Valve's "SteamWorks" API wherein all the functionality of handling things like DLC, game updates, achievements, etc., are provided to game developers for the low price of absolutely free but with the caveat that using it means the game absolutely has to use Steam.
So you end up with brick-and-mortars and Steam's direct competitors having to sell licenses and downloads for a game that would still require their competitor's service to install and use it anyway, which leads to the obvious implication that for each license sold in those alternative channels, the developer loses money equivalent to the difference they'd make if they just signed with Steam exclusively.