It takes space, not everyone can have shelves full of games, imagine arcades, most people can't have them at home.Preserving the software means nothing without the hardware to run it, many classic consoles and computers are breaking down and can't be fixed, while modern consoles are much more fragile not all consoles can have those clones.
Recent discs are not made to last, made with cheap plastic.Even if you take care of it, it does not last forever, cartridges and discs will someday stop working.For the people who claim that physical media is superior, nope, it's not perfect:
