It isn't a huge deal, but it was something I prefer. PC gaming had this problem before disc activation and DD became the norm. It was painful and cumbersome. On a console it is even more so, because I do have to get up and put the disc in. At least, on a PC, I am generally close. It is a huge convenience for me, and I imagine, a lot of other people that haven't experienced it. On Xbox now, I will get invites from friends playing a different game. If I want to play with them, I have to accept, then go change the disc. With the new system, I would simply have to pick "Join" or even say "Accept invite" to my Kinect.
The all digital copies is still available, yes. However, it isn't perfect. I cannot buy a disc and install it. I have to wait for the game to download. If MS allows preloading like Steam, that won't be a huge deal, because you can just activate it online at midnight or whatever and skip the waiting with slow speed because a million other people are trying to download this. People with slow internet and / or data caps are effected by this even more so than me, although I fear in the future I will be getting a data cap back.