I really think digital just infringes on people's nostalgia of owning a physical library of games, and the concept of having something to hold that represents "the game" is something that will take a very very long time for some people to shake off.
The idea of buying the right to play the game isn't enough for people, though like you pointed out, the physical materials like the case and disc cost very little. I think it's less about true value and more about sentimental value.
Because quite honestly, the argument that digital copies are more fragile than physical copies makes no sense as we've gone over again and again.
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The way I see it, I'm a big fan of physically owning a game, but I totally get why titles like SEGA's recent digital offerings would be a waste of money, and possibly a loss of profit for SEGA, if released as disc copies. Like Hell Yeah, for example. How do they gauge how many to make? What if they press too many? What if the game is just too "small" (in terms of graphical power and gameplay time) to compete with larger more retail-friendly games?
I could easily see every one of the SEGA digital titles being in a bargian bin if they went straight to disc. The Dreamcast Collection comes to mind. I see tons of those at Gamespot in the clearance bins. They're just four digital titles on a disc. Didn't seem like a smart move for SEGA in the end.
