There's another problem with digital distribution that could hurt PsP Go: geographic content restrictions. I could think of several scenarios where this would suck:
1. You live in a geographic no man's land (such as I) or you travel/move to one. I live in the US Virgin Islands, which means I'm not in the continental US, not in the 50 states definition, yet neither am I in an international country. Now, it's getting better, but while I can access the Sony/MS video stores, etc., I still cannot purchase content from the PSN store because I cannot use my credit cards, and points are being sold at above their dollar value everywhere I've looked. Now, before you go thinking it's just me and these small islands, Puerto Rico and some other places face many of the same stupid challenges created by dumbass content providers and stupid licensing agreements. This means that while Sony's dumb ass will sell us the consoles at our local retail outlets, they won't take our credit cards to allow us to purchase the games from the PsN store.
2. If you travel and need to update your content. Since these services typically filter by IP, you won't be able to download, say an important patch, or even a copy of the game if the file becomes corrupted while you're traveling outside of the region where you purchased your game. And of course, you won't be able to purchase any new games either until you come back to your original geographic location.
3. If you decide to move to another region. Same as #2 above.
4. Games not offered in your region will be perpetually unavailable to you, since you won't have the option to import as you would with physical media. Now, switching your region on the PsP Go may or may not be available to you and may or may not work, because as Netflix on X360 has shown, these asshole companies are going to greater lengths to filter by IP and block users out of content they are more than willing to pay for.
Physical media allows you to bypass these limitations, and while I know that many folks won't encounter these issues because they don't travel etc., it's still a consideration for someone who is considering going DD only.