I had misgivings about digital distribution before I got this job, but after a few years here, my attitude softened. I write software. The product I make isn't an optical disc. It's bits arranged to do something useful. I get paid to arrange bits. I went to school to learn how to arrange bits.
The same is true of video game developers. When I buy a game, the physical trappings are incidental to what I want, which is artfully arranged bits. The disc is only of any value to me because it contains a copy of those bits. I gave up some of the money I earned arranging bits to pay someone else for arranging bits in a way that pleases me. I didn't pay them for stamping a disc. I paid some other joker who doesn't even know what a bit is to do that. That joker's work is entirely parenthetical to the transaction I actually care about. It didn't improve the bits in any way to put them on a disc. All it did was facilitate the trade of my money for the bits.
And that is of some use! Putting the bits on a disc lets us pretend that they're more similar to traditional products like shoes and cars. It lets us buy, sell, and trade them like physical commodities. However, realistically, underneath it all, there are two things that matter to me. First, I want to be able to enjoy those bits. Second, I want to compensate their arrangers. And if I don't mind giving up some of the pretense a disc creates, such as being able to sell it (I never sell my games) or having an extra copy (which I know isn't permanent), why bother with the disc in the first place?