I don't think it can ever 'replace' live magic. But I see it as a different platform. When you see a trick live and it fools you - it's brilliant! You know there was no camera tricks. You looked where wanted to look etc. You are definitely more involved and present.
But I see TV magic as being able to add a different layer to the entertainment - film making. Take Derren Brown's Trick of the Mind for example. With editing and interesting music, Derren takes us from the streets of London, performing for 1 or 2 people to Italy where he has a crowd following him, to a restaurant where he performs 1 on 1 with a celebrity to a creepy abandoned victorian house. Allowing each setting to be a part of the 'theatre' of what he does. I think it is an incredibly engaging medium with so much potential.
Blaine also did it well because it wasn't so much about the magic but it was about the spectators. We tuned in to watch people freak out, be astonished, in awe.
Criss Angel...well..thats a topic for another day