Cloud storage? definatelly. I absolutely approve of solutions like steam - online, and on-demand content delivery is definatelly the way of the future.
As for the disk drive (or lack thereof) in the console itself is understandable. Will it support blue ray disks, and older 360 games? More likely then not. Wait, what?!
It seems that no one here remembers that the XB360 had a little known USB attachment - the HD-DVD drive. It worked great, and mine still works ^^ although they dont make those disks anymore.
If that thing has USB ports.... (and it will) you would just plug in your USB optical drive (dvd, blueray, whatever) to it, and do what you need to do