You touched on it, but I think the big point to highlight about digital distribution at present is that it really only benefits the studio distributing the film. It's not a great deal for cinemas, as they need to invest in new equipment that will ultimately become obsolete, or for audiences, who will ultimately be getting an inferior product as digital systems still cannot match the quality of 35mm projections.
The problem is that the 'quality loss' doesn't develop at the projection end, but rather in the post production: in the past ~15 years true optical workflows for film during post production have become exceedingly rare (probably only at the most 2-3 'non-arthouse' films per year now), and now 99% of films utilise the Digital Intermediate (DI) where the original camera negative (OCN) is scanned, and any colour correction etc are completed digitally with the major advantage that you can do things that a traditonal optical workflow simply cannot, coupled with the fact that the film can then be edited together in the digital realm as well.
For example, the film 'O Brother, Where Art Thou?', the cinematographer Roger Deakins (The Shawshank Redemption, 1984 [the one with John Hurt], No Country for Old Men and Skyfall amongst his other numerous works) and the Coen brothers (the directors) wanted a desaturated, 'golden' look to the skin tones, ground, foliage etc, but a normal sky. However it was impossible to accomplish this using traditional techniques as bleach bypassing combined with colour balancing would give the desired tones, but also do the same to the sky. Because of this they eventually tuned to using the DI technique (the first feature film released using it) where they could accomplish it.
Since then that has become practically the standard for film production, with one major advantage for the producers being that the colour balancing etc can be completed in a week or so compared to several weeks with the traditional method, and the film is much easier to edit as you don't have to produce inter-positives, and then physically cut the original negative before its printed to an inter-positive and then an inter-negative that is used for contact printing the release prints. In the DI method the edited DI is output back onto film using a laser, LEDs or lightjet etc, which is then used for contact printing the release prints (also conveniently avoiding the generation loss from the inter-positives and negs needed by the traditional optical method).
The quality problems however comes during the DI stage: these days its typical for the 35mm OCN to be scanned at 4K or 6K so to capture all of the detail possible, but because of the additional cost and time associated with 4K masters (as obviously computer effects etc have to be rendered at the same resolution for them to match with the live action, and 4k rendering takes a lot longer in total for the whole DI, effects etc), its typical for a lot of even very major features to have the DI completed at only 2K, which is nothing near what the film can achieve, so it doesn't really matter whether you see a film print or a DCP ultimately! Another reason is simply that most cinemas that brought projectors in the past few years opted for cheaper 2K models (although more are buying 4K compatible ones now as they've come massively down in price). Digital projectors have improved as I can remember seeing a film with one about 7 years or so ago, and was troubled by the lack of contrast in dark scenes,and occasional 'strobing', but I've not really noticed it in any digital projections in the past 2 or 3 years when it started to become much more common. Ultimately its the general customer that the cinemas have to cater to, and I'll bet that if you asked 100 most would say they wouldn't care how its shown (although there is of course the 'digital' buzzword that can be used in advertising to attract customers)
I will be truthful, I do prefer seeing a film print if possible, but sadly its becoming harder and harder. Just over a year ago though I got to see all 3 of the last Batman films back to back at the BFI Imax on 15 perf 70mm film (o.k 'Batman Begins' was a blow up from 35mm anamorphic from start to finish, and you could tell sometimes as the image was slightly soft in places but overall it looked good), and the quality of the Imax segments of both 'The Dark Knight' and 'The Dark Knight Rises' were astounding. Although the 35mm segments were from a DI, I was really lucky as the Imax parts of the prints that I saw were printed directly from the 15/70mm OCN (only about 12 prints in total were done like this for both films so to avoid degrading the OCN), and it was literally like looking at something real in front of me. You won't get me into see most 'Imax films' though as most are complete blow ups from Super 35 or digital, and just a waste of money as theres no discernible extra detail visible (in fact most new Imax's now only show digital projections, which is nowhere near the quality of true 15/70mm).
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excalibur2 unfortunately Brian in India especially their switching over to digital projection because of the massive cost savings (each 35mm print costs about $8,000+) that they can make, and once the digital projector is paid off they only have to pay for the digital print so ultimately the cost is lower (and the distributors are 'encouraging' the switch to digital by providing funding etc) although in my opinion it is a bit of a false saving.
There will be less demand for film from the big boys, although I don't know if they use special film in the movie industry which we don't use, but still must be some sort of knock on affect if only psychological to film manufacturers.
