Well, me, I've been paying about $9 USD per album downloaded from Amazon MP3. That's about $6 USD cheaper, or more, than if I bought a physical release ($15 USD or more).
As for actual WiiWare and Virtual Console, they don't involve retail products, because you buy them off of Nintendo's own network; granted, there ARE other places selling virtual titles - check Amazon.com for WiiWare and virtual console titles! - where they might actually be cheaper (by a few cents) - since you're paying direct money, instead of buying Wii points - but you have to figure out how to transfer from your computer to your Wii.
With regards to digital distribution - and all products in general - consumers eventually wisen up, and there's a limit to how much they'll pay for a certain product.
The blogosphere is lit up about recent games that turned out to be monumental disappointments. When a half-finished game is put to market, and at a $60 price tag, there's going to be a point at which the industry in general is going to have to re-evaluate itself, if it doesn't want to completely collapse - consumers will eventually wisen up and stop buying, until producers actually want to release quality product. If you don't want to create quality product, there's always someone else who is - your competitor.
I look at the American auto industry - GM, Ford, Chrysler, they basically collapsed because they refused to innovate, and keep making the same crap cars, even when faced with foreign competition. Now American automakers are trying to play catch-up, and it just isn't working.
And I see a similar case with the gaming industry - producers think they can keep pushing out the same crap, think people will still buy it, and not only that, but overcharge for it.
You ask me, there's eventually going to be a big collapse in the gaming industry, and what will remain are the hardcore producers and consumers who really believe in the medium. I look at indie games, and I can't help thinking it's those producers who will be the future of gaming.
I do think there will be a point at which the mainstream, fratboy gamer will become extinct, because the over-hyped, Hollywood-style producers that appeal to said demographic, will eventually disappoint the expectations of said demographic.
Another problem with most console releases these days, is, they're expensive because they cost so much to make - they behemoth-sized projects, that pretty much become impossible to maintain, as the bugs, glitches, and flaws that appear in them would attest to.
Much like how society in general is beginning to scale down, as people realize that their consumptuous, spend-happy behavior is unsustainable, I think gaming will become a lot more scaled down, too, as people realize they don't need to spend $60 just to get a quality game, and really, most of the time, the more expensive stuff is disappointing, anyway.
You say that, despite digital distribution making things cheaper for producers, producers will still charge the same for their products - if not more.
I'm saying, that the consumer will eventually wisen up, and say, "Either make your product cheaper, or I'm not buying." Because me, that's where I am now. There are plenty of people smarter than me; and if I'm saying that, I can only imagine that plenty more are as well.