We are discussing two different topics in here: First one being whether the game should be released on DVD, the second one being whether the game should offer a minimal installation option with only a few MB on the HDD.
Ad 1: DVD-Only is not a good idea. The comparisons here are rather interesting. Yes, CD-ROM drives became popular, but which was the first well known CD-only game? Rebel Assault I'd say... and I wouldn't compare Rebel Assault to RRR. Rebel Assault was LucasArts and StarWars universe, RRR is Larian Studios and DivDiv universe. Now, what might be the difference here?
Fact is that with making a DVD-only game, you might be very brave but in the same time rather silly since - as others pointed out - nobody will buy new hardware for a game unless it's a dead popular title like HL2 for example. And RRR is NOT popular (no problem for me, I'll like it anyway). So, is it a good idea to release a game only for a few members of the huge gamer society? No, it isn't if there is another way - and there is: just release the game on CD (AND DVD if you really want).
Ad 2: Minimal installation is a very ridiculous idea. The differences in data transfer rates of HDDs and disk drives are breathtaking, and why would someone choose to live with much higher loading times with playing from DVD when they can just install the game on their some hundred GB harddisk and get rather short loading times? Of course, people who have only a 5gb harddisk might be interested in such a thing, but honestly, how many people do have such harddisks AND play sophisticated games like DivDiv and (hopefully) RRR?