When I say 'made' a physical CD, I mean that I made it rather than having it professionally pressed and printed.
Take the Box of Goats album 'Universal Theory Of Everything'. That took roughly 9 months to make, on and off, spread across many evenings, recording all the different parts at Nick's house. We had recorded two tracks in a studio, were starting to gig, and needed something to give to venues to get us more gigs and to sell at gigs to anyone who wanted one. So an album was the logical thing to do as we already had loads of songs and we needed a physical product. It was fun making an album, at least to start with, though I think we ran out of steam towards the end and there are a couple of tracks that are not really finished.
I designed the cover, burned and printed labels on to the CDs. We got played on the radio on the back of sending one in to the local radio station and I probably sold about 20-30 at gigs. That's not many. On the other hand I don't have boxes of unwanted 10 year old albums sitting at home either. I just made enough copies for what we needed. At least those who bought the album might have listened to it. I doubt they would have if we had just given them a link to Soundcloud - the moment would have been gone by then.
Was it a waste of time? Well, no, it was hard work - but enjoyable work - and that's not the same thing. Whether you release physically or online you still have to make the recordings and, as I said previously, an album gives you a purpose and a focus that releasing single tracks doesn't. I don't miss all the printing of labels and burning of CDs though.
I didn't make an album to make money and unsurprisingly I didn't make any! All my Soundcloud material can be downloaded for free, though it is generally not because why would you if you can come back and listen any time (or, it's crap!)?. What I do know is that many, many more people around the world have listened to my music online than ever did to the physical CDs or the cassette albums I made in my bedroom 35 years ago - and that's the main thing for me.