Now with nearly everyone with high-enough speed internet access, such physical distribution of software is antiquated. And not a good business model.
It's a great business model. I quite like the nice printed books of artwork and stories I got with older games. Reading that stuff in a PDF is damn boring. Give me a dead tree, please (but remember to plant a replacement).
3) It costs $10 more to get Internet access without also getting cable.
You're confused. It actually costs $30-$50 less to get internet access without also getting cable, because cable + internet is upwards of $90 after tax, while internet is under $60, even after the stupid "for the first 12 months" bullshit.
Any circuit design must contain at least one part which is obsolete, two parts which are unobtainable, and three parts which are still under development.