It's true. But there are two sides to it. People like to collect things they are interested in. I'm sure you collect fishing lures, comic books, magic nose goblins, or something. I think that Switch games for instance are very non-collectable due to their completely plain spines and tiny size for cover art. But several companies like LRG are doing some cool things like full color instruction booklets, alternative art, steelbook or other packaging, and special extras. I also don't think anyone collects in order to display the plastic cases.
Personally, I collect because I want to immortalize the games that I'm interested in. Gaming is a huge part of my identity. I like having access to a physical library and I also like owning my stuff. I'm also an able internet seller for the occasions that something becomes extra valuable, so that I can use it to continue funding my hobby. There is no value for me in paying for digital games. Other "well I have a family and a job and don't have any time" people see things differently, and that's fine too.
That totally makes sense. My mindset on it has been to compare it to other physical media vs digital. Vinyl vs mp3 for instance, I get way more with vinyl than buying an album digitally. It has way more value in that it's an entirely different experience. For the most part with video game companies cutting cost over time, almost certainly intentionally, what I get from a physical game versus digital in terms of the experience is identical.
I love me a good special edition, though. Too bad we won't be getting any discounts on those anymore.
Also you're 100% right about Switch, that's my main gaming platform these days, and the cases are just so boring and ugly and pointless for such small cartridges. GCU (and potentially Prime) discounts coming to a close will likely push me the rest of the way over the digital edge.