I think the main argument for physical voting is that it's much safer precisely because it doesn't scale well - and so attacks against it don't scale well either. The manpower requirements buy you security.
> As painful as it is, I think we all need to trust the state, to some degree, to do the jobs that are the responsibility of the state.
I agree, but I think it does not apply to elections - simply because it's the one place where both the ruling party and competing groups have very strong incentives to mess with the process.
> Once the votes have been tallied for a district, isn't it possible to tamper with them as they are transmitted up the chain to the next link in the processing?
Yes, but again, the argument goes, the less scalable and more manpower-intensive the whole process is, the more difficult is to hack it.
> I think that is possible, the best we can hope for is to push for as much transparency as possible and hope that, if it comes to it, we have enough data to detect such tampering.
I agree with the call for transparency, but I also agree with the people who point out that inserting electronic systems destroys that transparency (too easy to hack, too complex for general population to inspect).