Ofcourse they will. They're not going to surrender without a fight, don't be silly. Just look at all the fuss Vivendi Universal kicked up about HL2 in the first place!
I'm not being remotely silly - that's uncalled for.
Vivendi kicked up a fuss because they had a contract and didn't want Valve competing with them. I can't blame Vivendi for fighting their corner but they didn't have a leg to stand on. Thanks to the profits of HL2 Valve no longer need to seek funding from a publisher like that. They won't ever be in that position again. If they offer their future stuff through the retail channel (and thats a big if) it will be on their own terms.
Distributors and retailers can kick up any fuss the like but if they don't have any ownership of the product there is nothing they can do.
The change won't be overnight but it IS inevitable.
HL2's price has been set by retail. When the industry is ready to drop retail the lower price will be its primary weapon.
And even if prices don't drop. Far more of the revenue will stay within the development community. This makes a lot more sense and should lead to better games.
Digital distribution has many other advantages too. There will be no scramble for shelf space. Games which are considered too 'niche' for the current hit based marketplace will become viable products - reaching their audience over time rather than in a 1-2 week window. Such games will be able to gather momentum via word-of-mouth etc.
You only need to look as far as BRL for an example of digital distribution making a software product a viable business for a small developer.
Microsoft have already begun to sell stuff online and Nintendo are making this a central feature of the Revolution. It's happening.