PC physical copies hasn’t totally died. You can still buy boxed editions and collectors editions for certain games.
And digital copies for consoles is quite popular too now. In fact, for many less popular games, not physical version is available.
so, not sure your observations universal.
regardless though, I’d guess it’s because the console market has to contend with the fact that many console owners won’t have internet on their consoles.
if only they had a tool to debug the… oh snap