They talked about doing it this way at launch, which they should have. The drive is available as a peripheral, at the cost difference (actually cheaper) of the digital vs disc console. It simplifies manufacturing and distribution, which helps get more consoles on shelves. Now when it doesn't matter as much, they implement it. Go figure.
As far as killing off physical media, yes it pushes further that way, but honestly the game industry has been not favorable to retail stores for some time. This is the least of the offenses.