No matter where you look in Media, digital copies have outpaced physical. And it´s not even close! So the step is not really a surprise. Also, some games are already essentially a digital copy, even if "some" game files get delivered on a disc. But the lack of a physical medium is not what sucks about this. It´s the fact that you link the purchase to your own account of whatever store it´s in and that´s it. No lending, selling or gifting once you activated the code. I actually prefer to buy cartridges for the switch because of that very reason.
But with digital downloads being so much more convenient and instantly available, I don´t see how any market forces would ever change this. Also, people pre order digital copies as if they worry the store wouldn´t have enough copies on launch day, which is also quite telling.