There’s still an audience for physical releases, people always enjoy having something to show for their money. We’re strange creatures in that we don’t always want something for what it is, we want it for what it represents to us.
There are a few artists, even members here (like jogging house for example), who sell tapes or LP’s as physical releases and they sell out of them. Why? Because they’re in touch with their audience and that’s what their audience wants to buy.
In reality, most artists will end up with a box full of tapes and very few sales, same as with any other physical or non-physical release. If there’s a paying audience and a demand for the product, the product will sell.