I've been steadily building a healthy physical collection for years, I was in a studio apartment until recently and I still managed to neatly present them no problem despite the limited space. Some very dramatic responses to the suggestion in this thread, there is such a thing as a shelf! Plus, if you get the right shelf it's a decoration as much as a collection. I've had people question how I have the space when they have large glass cabinets housing tiny anime figures. It's all down to personal preference, like I would never buy a huge-ass special edition of a game, for instance. I would, however, get that lovely Godzilla set from Criterion eventually!
Now, admittedly, it can get expensive. But to know I own something forever and can access it at anytime, with bonus content and in the best possible quality, has always made me prefer physical media over streaming or digital storefronts. There's just no telling what will happen to large swaths of content if Netflix goes up in flames eventually, which is a slim possibility when considering their recent issues. Plus, let's face it; the collection of old movies on most of these streaming services, especially Netflix, is fucking dire. As someone who watches movies every day, more or less, the HBO Max situation has just further validated my feelings on physical media vs. streaming. Completely aware that it's a privilege I have that not everyone can afford, though.