Well obviously used games is a big one but even ignoring that there are so many retailer lead deals out there. Due to the shear number of retailers competing, almost any digital distribution offered out there can be found for cheaper somewhere in retail. Plus we would also lose things like buy 2, get 1 free deals, Amazon's continious 5-8% being knocked off new games, $10 credit for preordering, preorder deals/limited editions bundles, ect. Digital distribution has also sucked for when a game goes down in price as publishers have been rather unwilling to lower their game by the same amount as retailers quickly do.
Um.. yes? You kinda answered the question yourself.
And besides Valves occasional deals, when has a digital distributor (microsoft, sony, nintendo) ever passed on the savings to the consumer? They seem pretty content on passing the savings into their own pocket book