If the download is a self extracting exe file that can be burn't to a CD (e.g like the Freefalcon3 addd-on for Falcon 4.0 or any other game patch for that matter), then I don't see what the problem with downloading it is in regards to keeping a backup copy of it.
For the poor sods on dial-up, the download could be split across numerous self extracting rar files or similar. I remember getting a game like this before (can't remember what it was right now though)
The CD option would of course increase production costs, but it is always nice to have some tangible object for your cash-even if it doesn't come in a pretty box.
So much for Перестро́йка (perestroika) huh? In the old days the game would have been released and the comrades would been TOLD how they were getting it....
"Good morning comrade. Here is your borscht, dry bread, oh and here is you LOMAC 1.1 CeeDeeski"
Oh yeah.....
I vote for the download option (but only 'cause I have broadband!)