This is because of copyright law: if you buy a physical disk, it is legal to rent that disk out. It was legally feasible for netflix to have an absolutely huge catalog of physical disks.
With streaming, there is no corresponding legal theory. The only way to legally stream content is to negotiate a license with the copyright holder. You can't just buy a disk. There is no mandatory licensing. And many of the studios want to compete with netflix, not license to them. So the catalog is much smaller.