Honestly, there's two major things that need to happen for physical media to be a bigger thing on PC. Think about things from a game publisher perspective and what kind of costs are associated with making physical media.

First, retail stores take a 20% cut of sales while digital doesn't. That's a big chunk of money that the retail stores need to sustain themselves, but that the game publisher also doesn't have to pay when they sell games digitally. This was the largest initial driver to go digital in the first place - digital games represented a significant rise in revenue for game publishers, so it was a new way to obtain sizable growth. Going back to physical media would require a similar kind of kickback.

Second, we need to do something about installation and used games. Digital games are easy to authenticate and difficult to pirate. You can't transfer or resell the game because it is attached to your account. Physical media doesn't have this restriction. This has moved forward more in recent years due to the prevalence and desire for ongoing content development - you need an internet connection and account in order to pay and obtain the DLC.

Overall, these two things would need to get ironed out before game publishers would be willing to push for physical media again. The authentication, DLC distribution, and ongoing development/live service game model helps push down the market for used games, but the largest obstacle remains the retailer cut.

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