Everyone loves a good tactile feel. Fidget spinner craze of 2017 is a prime example of how a simple toy that gives a 'feel-good' physical sensation can go viral. The original iPod with its click-wheel is another such example (I still proudly have my own).
So why are we seeing more touch screens - which are almost completely alienated from a tactile sensation? Mostly in cars, but on household appliances and industrial machinery as well!
Hardware engineers are few and far between
There are way more software engineers that can work on a GUI than hardware engineers that can build a good physical button.
Balena, one of my ex-employers, built a platform for embedded devices that would allow folks to use containers. One of the primary motivations for this was to make it easier for non-embedded developers to write in anything but C.
So instead of hiring engineers to write and maintain drivers for physical buttons, it makes sense to hire developers for building GUIs instead.
Hardware doesn't scale well
There's a nice clip of Andrej Karpathy on the Lex Fridman podcast where he talks about why Tesla moved away from ultrasonic sensors on their cars.
On the other hand, software scales well. You don't have to do calibration for each device, and it's easy to make changes - as a fix, or even just to change the aesthetics.
What's built once for a particular hardware is also easy to port to other similar hardware too. Most code for low level systems is written in C, and C is the most cross-platform language ever designed.
Having said this, there's still some people who build physical interfaces for their products. I think mass manufactured items will continue the transition to touch screens while luxury or niche products will try and bring out the physical buttons - as long as there are people alive who are nostalgic about them :)