The difference isn’t digital vs physical. Either medium can have DRM. It’s whether you own your copy or not.

Physical DRM like the classic dial-a-pirate is owned by you. You can choose to hand someone a copy of the game and the physical DRM, and they can play it. Nobody can take that right away from you.

Online DRM will always have the flaw of someone being able to take away your rights, for any reason. Thus, you don’t own a copy of the game. Since digital games can’t have physical DRM, the only way to truly own a digital copy of a game is DRM-free.

No actually, that would be impressive. The DS is barely capable of decoding video. Getting that to work in real time, over the network, and low latency is a huge technical achievement.

This is just a text input and output connected to a remote machine.