[pixelcort]

Some BitTorrent clients can detect each other over a LAN (using Bonjour/Zeroconf and/or Local Peer Discovery) and prioritize traffic to/from each other locally. Thus, with a fast enough efficiency becomes less of an issue, although for large enough files physical media transfer might still be faster.

Of course, if your peers are on different LANs but in close physical proximity then physical media becomes much more useful.

[sukhbir]

That is correct. But to keep things simple, I didn't go into that. My main intention was to see whether people actually feel the need for this and how it would scale.