We're on the train to Speculationopolis here, but Auntie doesn't think that Apple will jettison the box upgrade any time soon. Although the "disc is dead" catchphrase never fails to amuse Auntie, it's still early for Apple to adopt digital-only releases, especially with a public that likes purchasing physical form factors. Discs and USB drives continue to ship with new Apple products and probably will for a while more, even if there's a move toward digital as a primary OS distribution method.
As for the process of digital-only, Apple already has that way under control. Oodles of developers are doing quite well with their disk image Lion installs, so it's not the technology that's holding things back.
Auntie imagines this scenario: existing customers could use App Store on Snow Leopard to purchase a disk image at a discount. The image could then be burned to the customers' discs or stored on USB keys. Or, they could purchase an official Apple box.
If you consider 10.6 to have been an aberration, then upgrade prices might run US$99 for the Mac App Store route or $129 for a retail box. If you feel 10.6 defined the new OS retail pricing, then perhaps $39 and $69 might be more reasonable price points, or even less than that considering that 10.6 was $29 on disc. In any case, discounts could reflect the marginal improvement to turnover from the absence of physical media.
Apple still needs to invest in developing, testing and deploying the software. If Auntie's guess is correct, however, that the company will start treating the OS as service to maintain an ongoing hardware investment -- in other words, following the iOS model rather than the traditional Vista model -- lower prices will help pressure Apple's customer base towards modern updates at a more rapid pace than we've previously seen in the industry.
Apple will, as always, make a business decision. Auntie suspects that boxes will be a part of that decision for at least the next year.
Auntie "will make educated guesses for food" T.