Update thanks to thethatfox:
Physical game cards may also not actually contain the game:
Nintendo Switch 2 Game-Key Card Overview
Game-key cards are different from regular game cards, because they don’t contain the full game data. Instead, the game-key card is your “key” to downloading the full game to your system via the internet.
Update 2: There is probably a difference in Game-key cards and card that contain real game data. So we don’t know right now how often these game-key cards are used or if nintendo is using them.
Xbox actually tried this first and got so much backlash they canceled that and went back to traditional media.
Xbox will always be compared to playstation. And playstation took the opportunity to show the benefits of real physical media. Some features from xbox sound good, but it was for sure at the wrong time to do that. Also Xbox show to much how good it is to watch tv on a xbox. Marketing failed so much from microsoft at that time.