The cost of manufacturing the cartridge is actually tiny (64Gb thumb drive is $5 retail). It's the logistics around shipping it.

The real reason companies don't want physical media is because (1) any money is money they aren't pocketing (2) you can resell physical media when you are done with it (which for a bad game may be pretty soon after it ships to you).

Should have been available since the launch, but better late than never.

You would have access to the base game years after servers shut down regardless of whether it’s a GKC. Just look at how digital purchases work on 3DS and Wii U (and, well, any console with online servers that no longer operate). In fact, there is speculation that the cartridges which hold Switch 1/2 games will die out quicker on the physical versions, slower on the GKC.

That said, however, I am very pleased to finally see this problem finally starting to be addressed. It’s crazy that 64GB was the only option up until now.

Wow I had no idea they were only making it one size. That's crazy. Doing that Nintendo was basically forcing most devs into GKC's because why in the world would you pay for a 64gb card if your game is way smaller than that.

Technically it was available.
Switch 1 carts are forwards and backwards compatible between Switch and Switch 2.

You lose out on bandwidth, but developers can use a buffer on the Switch 2's internal drive to make up for that.

Was thinking about this earlier today, and the missing 1GB to 32GB cards could be intentional as those would be covered by the Switch 1 cartridges.
It could push developers to continue releasing Switch 1 games and offer upgrades for the Switch 2. Win-Win in this transitional period.

And for bigger current gen games that can only run on Switch 2, then those will most likely be above 32GB as seen here: https://gamrconnect.vgchartz.com/thread/249161/nintendo-switch-2-physical-game-list/

I'm with you guys. I realize that we live in a time where the final form of most games rarely ever exist on a physical medium thanks to patches and DLC, but being able to at least own the base game and know that I have access to it years after servers are down is important to me.

Those crap thumb drives aren't as fast as Switch 2 cartridges and half of them crap out after like a year of use (would certainly hope Switch 2 carts don't do that). 

Switch 2 cartridges are custom and are going to cost more. 

Looks like it's about $11.70 USD (equivalent to 10 euro) for these smaller sized carts as opposed to $16 that was leaked earlier for the 64GB carts from a 3rd party dev. 

That's a bit better, but still not cheap. 

I don't know exactly how much the Nintendo ones are, but I can guarantee you these things are going to be cheap as chips in volume.  Take a look at your favourite electronics components provider for the sort of prices to expect.  I'd be surprised if they picked something > $3.  This is straight profit margin for them...