It's true, it all depends on the developers jumping this train or not. And that was the same with Steam.
When it was just Valve selling their games through Steam, nobody believed in its success. Then suddenly publishers started to support it, and not just game by game, but they would put on their whole library and even the newest ones.

It really is the publishers that make this thing work or not. If it's replacing anything is a different question and depends more on how well the service works and the way you pay for your gaming time.
Since they're kind of the new generation and will probably be around for some time to make money, they could go in with very reasonable prices and service plans.

Looking at it from now and comparing it to what people like and prefer today won't matter in a few years.
I can well remember how I liked to physically own a music CD. Put it on my shelf and take it down to listen to it and having the cover and all. But it change a lot. Most devices built for music playback, like IPods, can't even play CDs. Digital musics stores have become numerous and it works well. I haven't bought a music CD in years, but bought trough Itunes mostly. Sure it was a slow change, but again, it was all about the publishers and how good the service works. You worry less about what happens to your owned product in the future, but rather how easy your access and storage has become.

And my guess is that they would add most old games to this service, so you can go back and play through gaming history. I'd like that a lot.