Update thanks to thethatfox:
Physical game cards may also not actually contain the game:
Nintendo Switch 2 Game-Key Card Overview
Game-key cards are different from regular game cards, because they don’t contain the full game data. Instead, the game-key card is your “key” to downloading the full game to your system via the internet.
Update 2: There is probably a difference in Game-key cards and card that contain real game data. So we don’t know right now how often these game-key cards are used or if nintendo is using them.
It doesn’t cost $8 per copy to manufacture. I can get a writable 64GB SD card delivered to my door for less than that. And a plastic case is pennies to manufacture.
It’s more about preventing people from trading or selling games with other people after they’ve finished playing them.