I also realized that giving media as gifts is dead as well. Hardly anyone that I know uses CD/DVD/Blu-Ray players any more.
I agree with your premise but it feels like something is lost here.
Gifting only the USB drive makes more sense for a nice movie collection like in the linked Twitter thread
I also have a Roku and a large USB thumb drive, so if I have time, I rip a movie onto the thumbdrive, thus, creating our own little on-demand service.