I prefer physical editions that come with a code in the box, if the cart is playable without the code.

More on topic with this thread: One example of a game that wouldn't fit uncompressed on the cheaper medium = "o noes the switch iz doomd!!"

Flash storage is drastically superior to discs for a variety of reasons. It is more expensive, yes, but it offers a tremendous performance increase. I do agree, in this day and age where you can buy 32GB SD cards in bulk for less than $5 ea (just based on the very first Google result I found) - a markup of less than a dollar from the cheapest 16GB price I found - that there's no reason it should be as expensive as you claim in the OP, but honestly I doubt it actually is as expensive as that, anyways.

Plot twist: "Physical" version of MK11 for Switch will come with a code in the box.

The issue isn't so much fitting it on physical media.. Its the cost of the carts.  Its an inevitable issue with a portable based system. Costs will come down over time. 

Quick question: isn't hellblade digital only on every platform?

Original release, yes. It's since gotten physical releases.

That's pretty awesome. Maybe they'll do the same for Switch somewhere down the line. I know the whole point of this thread is the size but maybe Ninja Theory can work a miracle.

seems pointless, might as well buy it on the eShop then

Then what's the point of the code?

Convenience of being able to load it without switching carts, while also affording the permanence of owning a cart and the ability to play well after the eshop listing is long gone.

That's, uh, been a common preference since the very first days of digital releases.