When it comes to games, I much prefer to the purely digital route. However, I totally understand why physical copies are necessary.
Some people - a lot of people if you're in the US - have really crappy internet connections, and probably a monthly data cap to make it even worse. For them, a physical copy is almost a must. But it also begs the question, why is an internet connection all but a must for consoles? Even with a physical copy, a lot of games need to download various assets (not talking patches here) required by the game in order for it to be playable. What are people with no internet connection supposed to do? Yes, they're out there. No, I don't know how they do much in today's world without. But that shouldn't preclude them from being able to own and use a console.
Then there's the game preservation aspect. I have games for the original Xbox that you will never be able to purchase again because lawyers are a scourge of the land. Obviously there are tons of games in that same category going much further back. Sony has a pretty spotty history with backwards compatibility, what happens to all those games when they shut down the PS4 store? Or in however many years when they shut down the PS5 store? Anything that they deem unworthy of being made backwards compatible with the PS84 Super-Ultra-Pro disappears into the ether. If you bought any of those games and want to play them sometime afterwards, or only just heard about how great all these old games are/were and want to check them out.... sucks to suck.
Now, when it comes to movies, you'll have to pry the physical copies out of my cold, dead hands. I'm sorry, but streaming - even 4K content - cannot hold a candle to the quality you get from a 4K blu-ray. Streaming is nice for the convenience factor of not having to get up to put the disc in, but that's where the benefits end in my eyes.