

IMHO, two hours is not nearly enough to get a feel for a game. At least, not for the sorts of games I tend to play. I spend longer than that just working through initial technical issues, configuration, and (in games that have one) the character generator.
I have to conclude that Steam’s return window is either intended to be just enough to see if you can get it running, or as much as Valve could talk publishers into tolerating.
I did call out data density in my first comment. Did you somehow miss that? Not all things that need storing are megabytes in size, though.
Why would you assume that paper means punch cards? Printers can store far more than a machine word on a page, are relatively cheap, and are widely available. For some things, this can be superior to both magnetic and flash storage.