Don't requirements like online server based verification and advancing crypto make it almost impossible to pirate these games?

Yes, for play-online titles for sure, but I think everything up to Xbox 360 / PS3 era has robust emulation and wide distribution of the whole library.

Obviously it's gotten harder over the years, but PS4 and PS5 jailbreaks do exist so that means there's a vector for dumping games that were only ever distributed digitally (at least ones released up to the point where the jailbreaks got patched, as the stores will refused to serve new content until you update your system).

Current-gen console jailbreaks may exist but are inaccessible to the vast majority of the public so I really doubt they will factor into any decisions made by Sony, Microsoft, etc.

Yes, fair, and that matters if the discussion is "I want to buy someone's physical copy of a game released a few months ago that they are finished with". Digital distribution with robust hardware security does in fact completely destroy that market, though notably Switch and Switch 2 physical games tend to keep their value, suggesting that maybe it has less to do with physical media itself and more than the second hand market follows the pricing set by the digital marketplace, and consumers know that Nintendo doesn't really do discounts, even years later.

All that said, I think my main argument with respect to emulation and root access was less about individuals having that access, and more that so long as someone gains that access even through extraordinary measures, the games can be dumped and distributed, at which point true ownership becomes possible (even if it takes a while for them to become playable on emulation or hacked hardware).