I think flash USB software and online downloads will pave the way. CD media will be available to download as it is only between 200-700MB in size anyway and DVD media will be made available with a slight premium on USB flash for ultraportable users.
I totally agree with you that the distribution model for software is changing. As of course is the model for entertainment media, although in entertainment it's far from a quick change to downloadable, Apple announced files, iPod-compatible versions of movies, actually coming stored on retail DVDs of those movies (and Sony announcing PSP playable files of movies coming on some Blu-ray releases) something I would have loved to have with CDs for a long time (I know, it's different, it's far faster to legally rip and encode a CD you own than do the same with a DVD you legally own, so why not let the user self-help with CDs? I mean, for some reasonable premium over download price, say I buy an iTunes music download album, DRM or no, and I check an option to be sent the CD release of the album I bought.) But with the MB Air, you make a choice in entertainment media: you can buy all your music via download, really almost all; you can limit yourself to movies available via download, or you can with the external drive or another computer rip and encode what you buy. That's a choice, perhaps at times an inconvenience but you make choice.
Software distribution is different, and this is where the MB Air can't be justified using the model for successfully dropping the floppy from the iMac. By then, for most commercial software of import, the distribution method *already was* CD, and developers grudgingly through a free floppy set in the box, and would send you one for a shipping and handling fee. When Jobs said, more or less, the floppy is dead, certainly on the distribution side, it was. But the DVD, even the CD, is far from dead in software distribution. Sure, a USB flash media at a slight premium for something that would fit on a CD anyway, under 1GB, or even under 500 MB. But take for example Apple's own GarageBand, easily used on an MB Air, the World Music Jam Pack, only $100, not a $2,000 pro software package, comes with about 12GB of content, on two double-layer DVDs (or one double, one single would do it, I think), and the premium for 12GB of USB flash media, even passed along at near break-even, would not be what you'd call slight. Witness the $3,100 MB Air: the extra $1,300 is not for that ext .2 GHz is in processor speed, I can tell you; it's the 64GB flash.
The $1,800 MB Air is an overpriced for feature set and weight/footprint ultra-portable, but can be justified perhaps as water-testing. But the $3,100 flash-based product is the dumbest Mac product since Sculley, you'd think intentionally, tried to run Apple into the ground. When you have to charge a $1,300 premium for less storage and no benefit but a storage media speed improvement not an issue for the target market -- drop protect is not the issue; with sudden motion sensors, dropping hard-drive based Mac notebooks doesn't break the drive; it's that expensive LCD you should worry about if you drop it -- it's just not ready. And mass flash storage is not ready for prime time. Not yet.
The sealed battery is just ridiculous. I don't swap batteries for more usage time, either; most people don't. But if I use my battery a lot and need to replace it has it no longer holds a good charge, it's one thing to spend $400 on an iPhone and then spend $80 to replace a $35 battery because it's sealed -- and Apple has a policy with iPods of not replacing the batteries, but swapping units out with refurbs of other battery replacers or it would cost even more than $60 to do a battery replacement on an owner by owner basis, with my iPhone I certainly don't appreciate that as I know how I take care of *my* iPhone -- it's another again to imagine doing a refurb swap for a $3,100 notebook computer; or, what, pay $400 and wait at least three days for a $125 battery replacement?
MacBook Air. Indeed. It's hot, the air I mean, not the product. Anyway, I don't mean to smash everyone over the head with MacBook Air, although from the looks of it, it wouldn't really hurt you. It's like most all Apple products beautifully designed; but it's just so impractical. I was quite pleased to be able to demote myself from the PowerBook MP Pro line with the advent of the powerful enough, small enough, nice enough MacBook; the Air seems like a reversal of a good consumer trend for Apple. And as for ergonomics, I have no evidence you really can be too rich, but any good clinician will tell you that you can certainly be too thin.
The iPhone software update was in my opinion the highlight of the show.
As for iTunes rentals, I either buy Blu-ray movies, or DVDs if not available on Blu-ray, or I'll even buy an iTunes Store download, but I'll no longer pay $4 for a day's movie rental on a non-subscription model. When you consider digitally that same movie is maybe $15 at most, $16 on a release-week discount up to $20 standard pricing for physical SD DVD media, perhaps only $30 for Blu-ray -- my stars, the remake of 3:10 to Yuma on Blu-ray was only $25 during release week -- and on SD DVD within 6 - 9 months you can find often find that same film on sale to own for $8, and I got my brand new copy of Scott's Black Hawk Down on Blu-ray for $12, a beautiful HD transfer and a couple dollars less than the SD DVD version at the time, on sale, the cost/benefit thing just doesn't work out.
As for the Time Capsule. 802.11n is lovely for streaming media. But I can stream a fully loaded AppleTV encode over 802.11b if not everyone else in the house is banging on the WiFi, and always a perfect stream in 802.11b/g mixed-environment mode (my daughter has a b-standard WiFi PSP). Backing up with Time Machine via WiFi, even 802.11n, is an awful solution, especially at $300 for 500MB. You can do the same with an Apple BaseStation for $280, go non-Apple for the WiFi w/ USB2 drive-sharing, but still a high quality product, perhaps as low $170; and you get a WiFi access point in the bargain -- as far as I know the Time Capsule is only a client to a WiFi network.
But I wouldn't even do that. I paid $120 for the high-end line of a premium brand of external drives, dual USB2 and FireWire as I happen to like FireWire, and I have that now mostly unused port; I could have had the same 500GB drive in USB2-only for $90. Time Machine back-ups are fast over FW or USB2. Over WiFi even 802.11n, they are awfully slow. I'm a writer, so a targeted set of back-ups, that's one thing, quite small. But a full back-up set, which is the whole point of Time Machine, to have on hand a full picture of your Mac if the worst happens, I can in an hour rack up more than 1GB for Time Machine to back up: I buy a TV show from iTunes, my wife goes a little nuts filming our kids with the digital camera in movie mode and I transfer those, I rip three or four new CDs. Sure, with Time Capsule, if I don't have to run out the door, the MacBook can sit and churn out the back-ups to Time Capsule all day if it wants, but do that with a couple or more Macs on a network at home, or even more with multiple Capsules in an office environment, you're beating down your lovely fast 802.11n WiFi network half the day.
I've wound on too long. Writer's weak tendon I'm afraid, and I need to get to work. But Apple it seems has a near-perfect software/hardware product line at the moment, and rather than do what is sometimes the wise thing, camp on your great line-up, spin out that iTunes rental store, do that iPhone software update, update that AppleTV software, then just call it a day, they went fishing or something new to ship. Not a smart move I think; I think a rushed-up release for which pricing is not yet low enough and the market is not yet ready. Had they wished to something innovative, something lots of people would appreciate, something that would sell even more AppleTVs than that $70 price drop, they could have announced a software update to activate the USB2 port on the AppleTV, not for extra media storage, but to WiFi share a third-party USB2 external hard drive: buy a Time Capsule, sure I guess, but better yet buy an AppleTV which rather readily makes you more of an iTunes Store customer, especially in the video segment, even if you already have a video-capable iPod or iPhone (my HDTV is a damn bit better than my iPhone for watching filmed entertainment), and you get a great media server and streaming client -- it really is; the AppleTV is the best on the market -- you get a WiFi storage client in the bargain.