Gamers are notorious for accepting whatever abuse game companies and studios want to inflict, and then keep buying and buying. All the horrible anti-consumer technologies and business practices from DRM to games that are released unfinished, to kernel-level anti-cheats and rootkits, all are routinely done with video games because the industry knows gamers are fanatics and will put up with anything.
If gamers want to stop this, they need to stop rewarding these companies with their money.
99% of gamers who are mad about physical disk distribution going away will still buy the digitally distributed games.
The whole point is that they aren't accepting it. In terms of sales PS2 > PS4 > PS5. That alone is already a big issue but it becomes just comically bad when you consider that the world population is about 33% larger than during the PS2 era, gaming has become completely normalized, and that the competition in modern times is mediocre.
Have profits gone down?
No, but they're also monetizing a bunch of extra ways that they weren't in the past. In the PS2 era, Sony made money from the cut of physical games and accessories and maybe the console itself if it was purchased far enough into the console lifespan. These days they have online subs, cuts of DLC and microtransactions plus all the other stuff they had previously. And they get bigger cuts for DLC, microtransactions and digital games since they are the (only) retailer.
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