I'd honestly prefer a 150-300 GB SSD to a 1 TB HDD in the upcoming consoles. You could always delete and re-download games if they're tied to your PSN/XBL account. Music, movies and pictures could be hosted through cloud storage.
In return we'd get sleeker, smaller systems and very short load times, which is a much more exciting prospect than having the whole XBLA library on your system.
In return we'd get sleeker, smaller systems and very short load times, which is a much more exciting prospect than having the whole XBLA library on your system.