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I'm hardly an expert on games, but I think I hardly think streaming from the hard drive would a big improvement. You would (at best) see stuff partially loaded, or there would have to be some generic replacement (assuming it's a 3D game) for textures, meshes and what not. This would prove to be just as annoying, if not more so.

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The key is the pacing of the asset streaming relative to the rate of environmental change the player is creating on the screen.

Streaming essentially disables fast travelling and teleporting to some extent, but makes slow travelling seamless and much, much more enjoyable. World of Warcraft was among the first online games to get it about right at launch, and I'm pretty sure the absence of loading screens was a huge factor in its universal acclaim.

A more recent example would be Diablo 3. There the absence of load screens and on-demand asset loading resulted in performance problems which persist to this day. I believe they're even considering re-introducing loading screens in the expansion.

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