In contrast, Nintendo's idea to sell physical games that are essentially transferrable keys seems like a much smarter compromise.
Part of the appeal for the Switch and Switch 2 is the stability of their resale market. It's easier to pay for a new game when you know you can get 50% of your money back on the used market.
Sony wouldn’t see any benefit from switching to game key discs. Nintendo introduced them to save on manufacturing costs, but game key discs wouldn’t give Sony any additional market or reduce costs any; they’d only shrink the physical market further.