Unlike the PC gaming space, console game delivery is still dominated by traditional brick & mortar retail. As a result, good old optical media is the means to load your game, even if a good majority of it is stored on the hard drive. The dirty little secret is that there are real performance limitations associated with loading and verifying a game from optical media. Now the game community is starting to call attention to this issue and it looks like games optimized for hard drive enabled game consoles are on the way.
Check out these interesting blog posts on the topic here:
And here for a specific game that confirms optimization for hard drive play: