Reason 1: Not all movies and TV shows will be made available on DVDs or Blu-Rays or other physical media. In many instances, the only way some movies and shows can be watched is via a streaming service.
Reason 2: Physical media requires storage space, and not everyone has storage space. If you live in a big house, it's easy to believe everyone lives in a big house. The sad truth is, lots of people live in apartments or trailers, with little or no space to spare for a physical media collection.