Because they can.
The vast majority of people who buy physical will switch to digital if they have no choice because they are going to play the next COD no matter what. If the console manufactures can switch to a more profitable distribution network without losing any sales, why wouldn't they do that?
By the way, you keep proving my point when you say the most profitable portion of most games is the DLC and micro transactions (that stuff is all digital). When they switch the games over to all digital, they will make more money because they will be using the same distribution channel as their DLC and micro transactions.
They will make more money. If you still aren't grasping it, that's your answer. They will make more money.