Except that if you look at everything, not just one part in a vacuum, you can see it's a move in the opposite direction.
This move returns the DDI to a supporting role, and not the primary means of acquiring D&D.
I want to reiterate that an subscription-only online model is completely compatible with physical play and families.
The things that support the notion that Wizards intends to continue the physical book model include the Encounters program and the retailer program that allows the FLGS to stock certain items early. This certainly encourages people to buy the physical product and participate in the FLGS community. These efforts make me happy, and I participate in them in every way that a customer can.
However, there are other signs that point to the physical book and object model failing, or at best they're ambiguous about what they actually mean.
For instance, the change to Essentials indicates that there had been a problem with the way Wizards was producing and selling books. If the previous thin hardback model were completely successful, there would have been no need for the change. Essentials is not actually cheaper -- it's equal or greater in terms of cost to match the same functionality that one had with the core three at the start of the 4e line. When the core set came out, you had to spend $30 each on three books to get a functional instance of the game. Now, you have to spend $20 on a Heroes book, $20 on the RC, $40 on the DM kit, and $30 on the Monster Vault. That's a total expenditure of $110 vs. $90. It's even more if you want to cover the player options that you got out of the first PHB.
There are other things. For example, the miniatures line. There have been no announcements of forthcoming releases, so they're pulling back on that aspect. And those much-decried booster packs that came out with Gamma World? They're making their way in to D&D, as well. It's an attempt to maintain store presence for D&D like their store presence for M:tG. We're going from expensive-to-produce collectibles to cheap-to-produce collectibles. How long until we have virtually-free-to-produce collectibles in the form of online tokens that we have to sustain with a subscription?
To me, all these things could be signs of desperation about the physical product model. Don't get me wrong: I like 4e, and I play 4e all the time. I just think it's possible that Wizards may be lying to us and screwing us again, like they have many times before. I think it's foolish to stick my head in the sand and pretend it could never happen. By recognizing the trend now and letting Wizards know how we feel, we may be able to change their plans about their potential disaster.
