You were technically never allowed to do that if you read the EULA fine print, but it didn't stop many people
A EULA does not have to be correct. Tons of absolutely unenforceable clauses end up in those.
What matters is that a physical release holds some value, as there is a resale market for it. Meanwhile, there is no market for „offline installers”.
Various software was transferrable. For instances, both the original Sim City 2000 and the original Myst stipulate that resale or transfer are allowed so long as the seller retains no copies.