A second Minnesotan must sound off here. Where I am (a suburb of the twin cities) our fastest connection option can occasionally reach 2 MBps. On rare occasions when the planets are aligned, the air temperature is perfect, and you sacrifice a 56k modem to the blood gods of the internet. Those that live in the Midwest know that the hardest part of that statement is probably getting the perfect temperature....
All joking aside, I'm inside the population bubble and still only get Docsis 1.0 service at my home.
Whenever I can, I like to purchase discs. They can be backed up, take minutes to load, and generally are less beholden to stupid DRM schemes and service failure.
This said, Steam is excellent. I can purchase much older games that don't see store shelves, the pricing is better than the complete wallet rape you get at most stores, and it only takes a couple of hours to download over night. Steam should not replace physical media, it should be a supplement to it.
All three of you are arguing over petty differences. That software license you click through, whether on Steam or not, basically forces you to give up all "ownership" of the game. You don't rent, lease, or own; you are a timeshare. Lord, I feel dirty even saying it.
Without getting into the piracy debate, you really have to ask yourself why people try to circumvent DRM in any form. I own a legal (disc) copy of Oblivion, but installed the cracked version on my computer. I do this because DRM causes harm to consumers, that only stops legal consumers from finding joy. When I purchase a game on Steam most of the DRM is hidden well, and doesn't influence my enjoyment of a game.
From where I sit, this is what scares physical media lovers. Steam (generally) does DRM without the intrusion (a huge leap forward), but lacks the perceived solidity and ease of use of traditional media. If Steam wasn't as good as it was, we wouldn't be having this debate.
Troll bait: Steam has proven itself so effective that EA is trying to steal the ideas (Origin). Isn't that the sign that you've done something right?