While game card sizes start at 4GB and go up by powers of 2, it does not mean the minimum size of the games is 4GB. They could be 2GB, or even 700MB, which I will use in this post about which type of game to buy, either physical or digital. Remember NSMBWii? The game itself is only ~300MB, and while they could have used a CD instead, the Wii did not have CD playback because it lacked that hardware, so they had to use the media the Wii was designed for. DVDs at a minimum of 4.7GB each.
Even assuming digital copies are 40% off the cost of physical copies, the main problem lies in the size of the games themselves. Having done some math, if a number of games sizing at 700MB were $40 each physically (assume the game was worth the price based on quality, not quantity), buying a 4GB memory card and buying 5 digital games at 700MB each costs $50 less than buying those same games physically at $40 a pop, and the card would still have 500MB left over. If the games were 2GB each, it is still less to buy 2 digital copies + 1 4GB memory card than to buy 2 physical copies, but the difference is only $2, still favoring digital copies, but not space left over.
As the size of the game increases, the tides shift, making it cost more going digital. That can be offset a bit by buying a single, much larger memory card, but only by so much. So, I would recommend that everyone go check the size of the game online first before making a purchase. If the game is not massive in size, then it would be better to go digital. If it is massive, then physical is better. Take note about DLC and such in the equation.