Disclaimer, I'm not Gen Z. I've been collecting CDs longer than Gen Z has existed. I'm just really excited for all of you discovering the benefits of physical media.

You can have your cake and eat it too by buying physical media (preferably as directly from the artists as possible), ripping, and self-hosting (Plex, Jellyfin, etc.). I just stopped in to add my new personal favorite kind of physical media collecting, buying vinyl (especially the fancy fun colored stuff or great album art) along with the FLAC digital download. Now I can buy the cool art thing (for that nostalgic playing experience too, not just dead collection weight), get the quality audio in my ears (faster than the physical media can be shipped), and I'm not adding to my overweight CD collection. The multigenerational vinyl collection I now maintain is another matter. I use bandcamp mostly for this, but there are other options out there.

Also, don't be afraid to scour the thrift stores for CDs too. Just make sure to open the cases to check for damage (and verify the correct CD inside). One can usually recover a slightly scratched CD, but if you ever see light straight through the metal layer then pass. I've personally seen loads of great stuff from the last millennium in pretty good condition as other people dump their physical collections in favor of streaming. CDs are now what vinyl was to us olds 20 years ago. Their loss is your gain.

As a bonus, if you're into retro gaming, you can usually find a few PlayStation (One) games and late 90s PC games mixed in with these collections because they all used the same sized cases as music CDs back then. Some of those software and PS1 CDs may also have the audio encoded as regular CD tracks rather than audio files in the data session.