I know a L3 switch can do routing, but is it feasible to be a router? Does Cisco make an ISR that allows being a core switch and router where you only need the one device?
The 6500 supports some WAN Interface cards and the 7600 supports switching modules but these are rather expensive solutions.
The trouble with using a switch to terminate WAN connectivity is that you then start running into limitations on the switch. 2 examples -
1) QOS is nowhere near as fully featured on a switch than on a router
2) NAT - only 6500 can do NAT and most enterprise have a need for NAT whether they like it or not.
Personally i would stick with the one router/one switch solution. And bear in mind that even if you went with an ISR and etherswitch module this is really only a router and separate L2 switch shoved into the same chassis :-)