Hopefully next gen (on the playstation side at least) retains the add-on disc drive thing we're hearing about. It allows everyone the option of a disc drive both now or in the future, it gives Sony an extra ~15 bucks to sink into the rest of the console's tech and the profit incentive for them is a small mark up on the add-on drive. It's about the best middleground we can hope for going forward in games. It's worth noting Sony has lots of support in areas of the world where internet connections still remain very poor, unreliable and even non-existent; something they've alluded to multiple times.
As for the discs themselves, the BD-XL 128GB standard would probs be the most viable option. Adds a little more space; and seeing as everything is just run off the internal storage anyway, they could do multiple discs if need be and the only inconvenience to the end user is the switching during installation. I wouldn't be surprised if discs eventually end up being a more limited run though.
What would make sense is that once a game goes gold it releases on digital as soon as possible, whereas for the disc based version you'll have to wait for the manufacture/shipping. And digital should be cheaper.
Also, Sony still sell 80% disc-based consoles and 35% disc-based games. I don't see that going away entirely this or next gen.
Nintendo also sell ~50% physical.
Rather than this either/or mindset, physical media should be something that settles into a sustainable slightly-premium niche that remains an option for those who want it and see it's benefits; while digital offers it's own obvious, but every different benefits in the mainstream.
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