Three years ago, pitching a line of Sega-CD reprints would have been a hard sell. But now, things have changed. LRG has an entire stable of releases under their belt, and a huge amount of gathered metrics to back up any such pitch they made.
Any company is going to be leery of financial risk, especially for a project like this. No one wants to get stuck holding the bag if a physical product doesn't sell out, and you've got a bunch of excess stock lying around gathering dust. It's the ever-present danger of dappling in physical media. But LRG's business model helps to mitigate that risk, and they have the numbers and practical examples to back that up. They even have competitors now, who are successfully employing the same approach.
At that point, the question isn't whether or not it can turn a profit. It's simply if the initial investment is worth the potential brand growth and goodwill. No one is making bank off of these re-prints. Physical media is a low-margin business to begin with. Even with mitigated risk, no one is going to be expecting high profits. So the real appeal for most developers is brand growth, prestige, and community goodwill. Collectors showing off their physical copies on social media, or using them to do Let's-Plays on video streaming sites is good publicity. A physical release is a good opportunity to re-promote your title, possibly years after it already released. Gets it back in the spot-light, and gets people talking about it again. That can be worth the trouble of going through a company like LRG for a physical release.