Physical PC games weren't great in the 2000s. Online activated serial keys, optical disc based DRM that caused problems during both the 9x>NT and XP>Vista transitions, the only thing that made PC gaming tolerable for me was gamecopyworld. Valve (eventually) offered something better than that.

PC games can still be physical. Burn some discs or copy the files onto a USB stick and put it in a box. I think it's crazy that boutique companies like Limited Run Games completely avoid the platform when it's the only one left that isn't actively hostile to the core principles of the company. Admittedly PC does have the image of being a digital distribution only platform these days, but it's illusory and breaking that illusion is a marketing problem.

People were pretty pissed about the xbox layoffs, it's just that things move fast and this was the next thing.