Video game consoles started out originally using game cartridges, commonly referred to simply as carts. They always worked, and the only time you ever had a problem with one is when the contacts physically eroded over time – but it took a long time for that to happen. Heck, there are 25-year-old NES carts even now that still work as good as the day they were new.
All full (meaning not portable) game consoles right now use optical media for primary games ("primary" meaning not game-to-SD like WiiWare). Compared to carts they are notoriously unreliable – even so much to the point you’ll sometimes receive a bad disc out of the box.
Given the fact that Flash media is so cheap these days, one wonders if the game console industry should go back to the cart.
A few problems would be immediately taken care of by using carts again:
1. No skipping.
Carts are solid state by design, therefore no moving parts, therefore no skipping.
2. Much faster access time.
Everybody hates the long "loading" screen. On carts the load time is decreased significantly.
3. Ability to save data direct-on-cart.
Games on optical media have no ability to save game data direct-to-disc. Anything you save is done elsewhere, be it to a memory card or online.
I’m sure you could think of a few more, but you get the general idea.
I for one think optical media for video games should be dumped completely for the cart. Game developers would sincerely appreciate having more data to use at their disposal (the minimum cart storage would probably be at least 8GB), and gamers would love the rock-solid reliability of the format and the speed increase.
Unfortunately from what I can gather there is no intention of future game consoles (the "Wii HD" probably being one of them in 2011) employing the use of carts.
There should be.
…or at least have a hybrid system developed that can play optical and new-generation carts for maximum game library compatibility.
What do you think?

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Although I've never been a fan of optical media, I support their use in the gaming industry for the following reasons:
1) Cost: DVDs are much cheaper to manufacture, thus games are cheaper on disc. Remeber Atari 2600 cartridges? They weren't cheap at all.
Furthermore, 10 game titles on DVD weigh less than 10 titles on cartridge. As a result, international trading is chaper. Hence the lower prices at the shop.
2) Environment: Making a cartridge requires more raw materials in the manufacturing process (which also makes it expensive). A cartridge has more polluting elements than a DVD.
3) Durability: In the 80's, cartridge were quite solid and reliable, and relatively child proof. Today, a thin game cartridge (a glorified SD) is far more delicate, vulnerable to EM fields and to the destructive power of children.
I think that optical discs, with all their shortcomings, are still the best way to go.
I think games were better in a lot of ways on the carts. Faster loads, less lag, etc. Of course we had less elaborate cut scenes, but so many games these days go overboard on those, IMO.
I'm not buying the cost argument. Certainly, they're cheaper to make, but as far as I can tell that savings has never been passed along to the consumer.