Well we moved from cartridges because

1. CD's are cheaper to make. Carts are actually pretty expensive to mass produce, one of the reasons why games were really expensive back in the cart days.
2. There is massive amounts of more room on a CD than on a cart. Which is why during the Playstation/N64 generation. Playstation games generally had much better audio quality and had cgi/fmv movie sequences over carts. This is even more so now with Dual Layered DVDs and Sonys mega spaced Blu Ray discs. You couldn't make a HD game on a cart...

If you haven't noticed though gaming is slowly looking to take a "downloadable" route. It is very likely that a few gens down the road you won't actually buy a "physical" new game you will just download it from say Xbox Live or PS3 Home and play it right from your HDD. We are already doing this with classic games. (Which I'm surprised you aren't aboard for this generation which caters a lot to old school gamers with Xbox Live Arcade or Nintendo Wii's Virtual Console. Which offer official downloads of classic games and in the case of Live Microsoft adds online/multiplayer play into the classics making them even more fun to play than before.

Asianstoner: I've seen that video before. My 360 is buggy to, just this past weekend my 360 shut down and gave me the 3 red rings of doom for a moment which indicates a future death sentence for my 360. However Microsoft is really going out of their way for these issues I called them about it. They found the problem (a problem thats a potential flaw in all 360s made up until this point) they are fixing them for future models, they are extending warranties on the older machines for 3 years. They are offering free repairs to anyone that receives the 3 red ring of death lights. So if you got a 360 the most you'd have to worry about is having to send it in for a couple weeks at some point. Hell I made the mistake of not registering my 360 when I bought it 6 months ago, when I called MS this week to ask about my 3 red light problem, the guy on the phone registered my 360 right then and there without giving me the run around. They could have told me I was out of luck and would have to pay out my ass since I didn't register back when I bought it, but they didn't.