Personally if I had a choice between $49.95 at retail and $29.95 online, guess what I'm going to pick. The prices used are just as an example but you can see where this is going.
I agree, but my point is that there won't be a price difference in the first place. At least, not for HL2. The bandwidth and market is not there to support every single person who wants to play Half-life 2, Counter-strike 2, or whatever else is pumped out over Steam. Then you have to consider that Valve is opening Steam to other companies, so it won't be only Valve's products being jammed down the pipeline.
Let's say HL2 sells even better than HL1, and suddenly a good chunk of the PC gaming market, both casual and hardcore, has Steam. THEN the possibility of cutting out retailers and publishers will appear, but the idea itself won't come to fruition for a long time, primarily because of infrastructure. Unless Valve's got a pipeline into the Internet2 setup, I can't see their servers handling, let's say, 150,000 downloads at release.