It is a poor workman who blames his tools.
The false premise underlying this question annoys me; I have rewritten this answer several times to try to take out the withering sarcasm and the ire, but I think that ultimately it is more honest and effective to admit that I am working hard to be respectful while I am annoyed.
I have worked on teams that rely heavily on email and I've never been demotivated by it.
I've also worked on teams that rely heavily on physical presence, and I've found that to be soul deadening. Different people prefer different modes of communication; it is your job to recognize that and to select a communications path that is most effective.
1) It is your job to motivate the team using the communications mechanisms at your disposal. You choose that, and you need to own your choice. If you believe that email is the wrong choice, don't use it. On the other hand if there are management constraints/Organizational Operational Factors that constrain you to only email, then use email. But the tool isn't the problem, the deployment is. Concentrate on the job, not on factors that are outside your control.
2) There are multiple theories of motivation; none of the credible theories reference email. What does motivate your staff? Money? respect? Challenge? Flexibility? Autonomy? really excellent coffee? Each of these can be delivered by email; each of these can be delivered through some other communications mechanism. Failing to identify the factors that motivate/demotivate your employees is a failure.
3) If they say that they are demotivated by email, and if email is the only tool that is permitted, it is still your problem to solve. You need to (a) find ways to make the email motivational and (b) work with management to find alternatives. Perhaps you use SMS or Skype or Google circles or Facebook, or telepresence, or annual conferences. If they really find email demotivational, then I suggest that they find a new job outside the technology industry. There are many career fields that don't require email. many of them are lower paid and less respected, but part of that pay and respect is compensation for being professional and recognizing that it is our obligation to prioritize the job over personal preferences and to work as a team towards achieving the goal, even if it means that we sometimes have to bring our own motivation to the table to counter innate demotivational forces in the job.
There is a demographic in the community who want to blame email for all the world's problems; it is a simple answer and a popular answer, but like most simple, popular answers it isn't very useful at solving problems. I'd be willing to trade 100 emails a day for the rest of my life in exchange for not enduring another phone call or meeting where someone drones on about their vanity project and demonstrates desperate need for an interpersonal spam filter, or one of the phone calls where the clear agenda is to continue the phone call until everyone involved agrees out of sheer exhaustion. My point is not to vent my spleen here, my point is that different people respond differently to the same communications channel, and assuming that everyone responds the same way you do is far more demotivational than the channel could be; I'm not asserting that you're doing this, I don't have sufficient information. But it is common and there isn't enough information in your posting to exclude that possibility.
The problem is demotivated employees. Blaming email probably isn't a useful analytic framework. Keep trying alternative analytic frameworks until you find one that both describes the problem and presents a potential solution.