I don’t think Dmitry was saying it has anything to do with the crazy pricing just pointing out that sensibilities have changed and people value space and portability more than physical things.

But even with that, you point out why they two are linked. If having the space to store physical media is a luxury then only people who can afford it will be buying the physical media. This means that the general market is dominated by those people who will be willing to pay more. As supply dwindles everyone else won’t even bother with physical media. Because this then diminishes the market for physical media economies of scale decrease so there is less incentive for manufacturing to do any kind of rerelease.

It’s like all things similar; vinyl records, Kodak instant film, 5 1/4” floppy disks, CRT monitors…. At some point they stop being made, then the become garbage, then they become valuable again because they are old, rare and have nostalgia. If the niche market is large enough to support the manufacturing cost to bring them back or keeping them afloat (vinyl, instant film) they will be. If not (CRTs, VHS tapes) they won’t.