I'm in favour.
between two each of PS1, PS2 and PS3, Dreamcast, gamecube, Wii, Xbox, and *5* xbox 360's not to mention 15 years of PC gaming I have acquired literally hundreds of game discs. I have to dedicate an entire 15ft wall of my living room to their storage... all the other walls are occupied by dvd and blu-rays. it's getting ridiculous.
putting aside physical storage space as an issue, I have lost count of the number of games and films I have had to replace over the years due to disc scratches rendering them non functional. (kids).
I am 100% in favour of an optical-driveless next generation xbox, or indeed any other console... I've been a heavy itunes user for tunes and movies for nearly a decade and have never encountered a problem - I once lost my entire itunes collection when both the iMac and the backup hard disks were destroyed by fire - out of pocket? No. I contacted itunes customer services and within 6 hours my entire download history of everything i had ever bought was available in my download queue for me to redownload. took days, but no biggy.
likewise, an xbox died (rrod) - able to download every xbox live purchase again, for free to my new console.
physical media is anachronistic... all I can do is hope they put a sufficiently large hard disk in the new xbox so that I don't have to consider an eventual upgrade as I did xmas time - replacing an original 20gb xbox premium with the 320gb call of duty modern warfare xbox - purely because I had no space left on the disk and literally nothing I could delete.
at the end of the day, lack of optical drive isn't really an issue for me, if i want a disc player i'll buy a dvd player ~£30 for a half decent one, or £70-100 for a reasonable blu-ray player... or, it might actually motivate me to buy the decent blu-ray player i've been thinking about for a while - perhaps something from arcam, to do my plasma telly justice.