Because "Joe Average Consumer" doesn't understand the economics of game publishing. People didn't understand in the N64 era either why the N64 wasn't getting games, you had to have a knowledge of the economics of producing cartridges vs CDs to understand what was happening. 

Nintendo's fanbase (specifically the one that isn't clued in to the pricing dynamics ... so like 99.9% of the general consumer) generally hasn't had to make a choice between cartridge vs digital on Switch 1 because performance of games was relatively the same (or close enough) and Switch 1 cartridges were cheap enough that you could buy either or version with no difference. 

In that case, a lot of people stayed physical because why not. If you want to sell a game you can do that, if you want to collect you can do that, and there's no real penalty for that. Also having all the data on a cartridge means you don't have to buy a larger SD Card for storage as some/most of the data is on the cartridge. 

On the Playstation and XBox ecosystems meanwhile people are ditching physical in droves because they've realized there is a massive difference, the "physical" copies of PS5/XBox games these days are nothing more than just glorified keys in a way themselves. You can't really play the games off the discs themselves anymore and need to install to the SSD to play anything, and a lot of people in that case have just stopped buying physical altogether. A lot of people also realized that even if you buy physical, a lot of games have a day 1 or day 20 patch or whatever, so the whole "the whole game is on the disc!!!!" is a lie a lot of the time. 

In that case many people are just saying "fuck it, I'll just buy digital, I can start playing right at midnight instead of having to wake up and go to freaking Best Buy to play tomorrow". 

That is likely the same thing a "cold storage" cartridge would accomplish for Nintendo ... once people realize that a super slow but cheap cart can't actually run a game but needs to install to internal storage, once more people realize internal storage and SD Card Express is much faster, most people's interest in that style of format will likely follow what has happened on Playstation and XBox platforms. 

Right now a lot of people don't understand Switch 2 is very different from Switch 1, the internal storage is quite fast, a cartridge cannot match that speed, and even to bring the cart speed up to a half reasonable level makes the cartridges fairly expensive. 

SquareEnix: Hamaguchi san, people admire you, help us out here. We just-

Hamaguchi: Say no more! *Proceeds to take gamers for idiots*

In this case I understand why they are using a GKC, but Im still never buying a GKC, so it really doesnt matter.

The other thing about Switch 2 cartridges because I'm calling it right now a lot of people are going to get hung up on the following:

Low budget/indie developer makes Switch 1 tier game (lets call it Indie Farm Moon, a farm simulator)

Low budget/indie dev realizes that they can get an essentially "free" (or low cost) Switch 2 version of this game for almost no work required by just bumping the screen resolution of the game to 1080p undocked, 2K docked or whatever.

They can now justifiably make a Switch 2 version of the game for $10 more even on a cartridge because they're essentially paying nothing for the Switch 2 version of the game. It's just, easy free money in that case. That being the case they can upcharge $10 for the Switch 2 version which covers most of the cost of the cartridge ($16) and live with that.

Because frankly Switch 2 in that case is just bonus gravy money.

Now what you will see happen is a bunch of stupid commentary like "well if fucking little indie dev can afford to put their games on a cart, big publisher of some PS5 port on Switch 2 should too!!!! No excuses!!!! Greeeeeedy!".

When this is not comparable at all. In the case of say a developer porting a PS5 tier title (lets say Star Wars Outlaws as an example) the publisher in that case wants margin parity with the PS5/XBox versions and they're not wrong to want that. This isn't a Switch 1 game where they just upped the resolution and suddenly got two versions of the same game.

Even Capcom have said it is a case of money, they will make more using key cards.

It's just not realistic to ask publishers to give up like 30-40% of their profit margin for a format that isn't even any good and doesn't enhance the game in any way (it makes it worse actually with the worst loading times possible). 

Especially when that is not the case on any other format they work on, like it ain't happening.

For PS5-XBSS games, the Switch 2 version probably costs a bit more than the other ports because it's hardware is a bit more challenging to port than say taking a PS5 game and making an XBox version, so there's already that working against Switch 2 versions, you want the publisher to on top of that take significantly less profit margin to accommodate a cartridge as well? 

Like you're really starting to push it with such an ask. 

If you're a friend of a friend and just casually know someone and ask for a ride back from a party, fine, but if you're asking for a ride completely the other way across town and then on top of it want to make a pit stop to pick up dry cleaning or some dumb shit ... like c'mon dude. You're really fucking pushing it with that ask, you can't push 3rd parties to ridiculous levels, they're not anti-Nintendo anymore per se, but you can't push your luck and ask for the moon either. Nintendo doesn't have that kind of sway with 3rd parties and they know it, the GCK was meant to be a reasonable way to allow physical SKUs of Switch 2 games that can be sold in a retail setting while keeping a profit margin similar to PS5/XBox retail games. It's not some insidious conspiracy.