I don't know how it is in the UK, but around here, the selection of PC games in-store isn't half of what it used to be. Several titles still make it to the shelves, most notably MMORPGs and high-profile games, but many releases are now available on Steam only. For them to limit the products on display, I think it'll only hurt their sales as the customers will go somewhere else or immediately go with the downloadable. I see their point, and I agree to a certain degree, but I don't think that this action would have much of an effect.

If I have the choice between a game box and a Steam purchase, I'll get the box. If said box game still requires Steam, perhaps for preventing illegal copies, then I know that I won't have the choice to use it anyway. I'd rather get something not tied to any external system, but I'd say that this is better than having a nasty rootkit installed by Ubisoft and similar companies.