I agree that this can be a problem, but within a few years, should the internet not be able to handle this sort of load if its development is steered into the right direction?
Large file sizes certainly don't seem to frighten off those who use P2P systems to get their mitts on movies and cracked versions of software. Although I have no idea if the numbers of people who do this in anyway reflect the numbers of people who would be wiling to rent a game online or who already purchase them from steam or direct 2 drive type services.
Here's another idea that could perhaps reduce piracy: include a snazzy smart key that could be read (via USB port, perhaps) that will grant access to legitimately purchased software.
Here's how it could work:
1. Prospective game buyers/renters (herein referred to as 'gamers' ) are provided (free of charge - to encourage people to use it -- or with a small one-time charge to prevent on-site piracy as discussed in 4. below) a smart card and reader (much like the Entrust systems) at any game retailer;
2. Gamers select their desired game, pay for it at the counter/online shop, during which process their smart card gets loaded (either directly at the counter or via an email attachment) with the initial part of a crypto access key for accessing the game;
3. Game is installed. During this process, the smart card interacts with the seller's/publisher's website and confirms that the game is legitimate. If the game is a rental, an expiry date is entered into the software, which will disable it after a given time frame, unless an additional rental is made or the game is purchased, at which time the game becomes a fully-functioning version.
4. The smart card is no longer needed to run the game, as it was originally authenticated. However, to install the game onto a new computer, the smart card is required. There are no limits imposed to the number of installations as this control measure imposes a requirement to physically possess the smart card, thereby reducing the volume and rate of piracy using any single license for use.
This certainly imposes an additional complexity (which should be minor once gamers get used to the idea) and I think some developers use a similar concept (Battlefront.com does this, but entirely through software, which means that if the system is cracked there is no physical safeguard). However, in some ways, this harkens back to the good old days of needing to rifle through a game manual to find the right password before starting the day's gaming session.