Digital Agency

I was reading David Armano's manifesto in response to AdAge and Forrester's comments about agencies not doing a great job being brand stewards (i'm greatly summarizing here), and focusing more on the experience (naturally). For those of you in the agency business, do you agree? Is there a disconnect? How far back is an agency be expected to travel inside a client company to develop that brand relationship? And should they be paid more to do so!? ;)

What is a digital agency? 

Is it staffed with binary people?

Is an agency that produces TV ads a 'cathode ray agency'

Funny term digital - means not much to most client side marketers.