Maybe the real question is whether people still want to own what they pay for, and holding a disc or record feels like actually having it. That alone could explain why physical media is creeping back, even if the other side thinks convenience wins.
Honestly my opponent's point seems like a fair one and I am not sure how to argue back. But practically speaking, if everything is digital, someone can just pull it from you overnight. Owning the disc means it stays yours.