In the early 90s, a compact disc was a very new and cool concept. You could get better quality music out of a compact disc than with a more common cassette tape. On the computer side, CDs were nice because they had a very, very large capacity compared to other removable media. Even though CDs were read only, CD-rom drives were popular in new consumer-grade computers by the time the Pentium Processor was widely used. As the format evolved, the DVD was introduced. It was designed to play higher quality video. On the computer side, it provided an even larger capacity for software distribution.
We are now in the third generation of optical media. It was engineered to support Hi-Definition video content. Computers haven't widely adopted the use of blu-ray or hd-dvd drives. DVD media is by far more common, and a DVD disk has plenty of space for today's software.
I believe it is time for optical media to come to an end.
Optical media development is driven by demand for a medium that can handle multimedia content. CDs have almost disappeared from consumers' homes and cars. Instead, they rip their music from the CD and place it on an iPod or another portable media player. Many people don't even bother buying the actual disk. They simply download songs from music store services such as iTunes. There is no need for a physical medium when dealing with music. Many cars have systems that can interface with portable music players.
DVD-quality video is also transferable over the internet. Broadband connections are by far the most common way for homes and businesses to obtain internet access. Many areas are moving to fiber optic networks to provide internet access.
The computer industry can transfer data and software over the internet no problem. That's what networks were designed to do. Optical media can be easily damaged. A file on the Internet can remain in cyberspace indefinitely. Even with hardware failures, there will be a copy of the software somewhere.
Optical media is commonly used as installation media for operating systems. This is easily overcome, as computers have been able to boot from other external media such as flash drives for a long time now.
Optical media is clunky for backup because today's hard drives are much too big, and the writing process too long for practicality.
The only thing that I'm not sure how to replace is Hi Definition content. As flat files, they are enormous. Some kind of physical medium or disk is required to store and access this amount of information. Modern hard drives can only hold so much hi definition content at one time. A hard drive is hardly a replacement for an entire library of hi definition movies.
There are some people that believe that with the upscaling DVD player available and cheaper than blu-ray players, that the market will eliminate the need for HD content on discs. Upscaling DVD players do a good enough job to the satisfaction of most people, and it is fully compatible with their current collection of DVD movies.
I believe that a chip-based memory would be ideal for distributing HD content. There is less start-up cost for publishing things on flash drive than paying to have a master die made for optical media. If re-writeable flash media is used, a movie that doesn't sell well can have the physical media re-imaged with another movie.
With optical media out of the question, laptops can be made smaller, there will be fewer moving parts, watching movies will be quieter. There is nothing more annoying than the vibration of the optical drive when trying to watch a quite part of a movie.
Even the mechanical hard drives are being replaced with flash-based storage on some systems. It is only a matter of time before all computers will be all solid-state.
In the movie "Star Trek: First Contact", set about 40 or 50 years in the future, Zefram Cochrane plays music stored on a green chip that looked slightly smaller than an optical compact disk. Today's USB flash drives have plenty of space for music, and are much smaller than the chip that Dr. Cochrane was using.
Optical media is easily scratched, and destroyed. Flash memory can also go bad, but would be easy to replace. A bad flash drive could be taken in and exchanged for another. There is no need for a physical master die, so things could be replaced long after they are "out of print."