I think it depends on the age of the recipient, and your relationship with them. For example, my nephew and niece this year got an Amazon voucher each from us, because there's nothing they would like better than to choose heir own present. It's mildly better than putting cash in an envelope, but it means they get what they really want. I could have selected a present for each of them, but I know for certain that at their age, they'd rather have the digital voucher. Likewise, an iTunes voucher I've bought for someone else and a digital copy of a movie for a third.
However, for my parents, I'd never do it, because digital isn't "real".
So, I think they can be great, but for some people, you can't do it.