Well there's a huge difference between "digital manuals are inherently worse than physical ones," and "the digital manuals we actually get tend to suck." Sure, a lot of digital manuals suck, but there's no actual technical limitation that keeps them that way.
In fact, you could argue that digital manuals inherently have tons of advantages over physical ones, by their very nature: The fact that there's no need to worry about damaging or losing the manual (or buying a used game that doesn't have one), and the ability to jump through the contents with just a button tap instead of flipping pages come to mind.
And then of course when you turn to systems with some sort of touch or motion technology (DS, Wii), it becomes even more intuitive and fluid.