It'd be cool if, ya know, digital releases came with transferable, irrevocable licenses, and the freedom to create your own physical backups for your games without needing to "check in".
But we won't get that. We'll never even get close to that.
So in lieu of that, we have to stick with the discs, because that's the last distribution method where there were proper consumer protections in place.
We're stuck with this dated format and it's low storage space because these businesses have utterly refused to provide us the same benefits in the digital space as we got from the discs, and the trade-off for the convenience is unacceptable.