It does. I’m sure most people don’t think the quality difference is worth the hassle of storing physical discs and paying for them. Compressed 1080 is good enough.

A decent number of streaming services have very good 4K and all you need is a Chromecast Ultra with a $200 TV to make it all work.

True, except now in EU, the bitrate of 4k streaming is low because the EC asked companies to reduce it. This because of the COVID-19 pandemic leading to everyone [who can] being required to work from home.

Yeah, if you buy a new TV and sit close to it you can tell the difference. But I think for most people 1080p at a distance was acceptable where a fullscreen VHS picture would have been illegible, and the convenience became the next biggest factor. The leap from VHS to DVD was a lot larger than the leap from DVD to Blu-ray, in terms of the perceived quality IMO.

Yes. Streaming services provide 1080p or 4k resolution images but it doesn't matter because they apply heavy compression in order to save bandwidth. In my experience, even 100% black frames have artifacts. No wonder people turn to copyright infringement.