Switch pricing is so fucked up, this should be priced like Kamiko at this point. Nintendo's tight gate keeper control on releases are just limiting competition and enabling developers to fleece customers hand over fist.
I feel the same way about the digital version. Best advice to say is no one is forcing you to buy it. It's been offered on Humble Bundle for PC, there's a freeware version, and literally three different versions can be played on the 3DS alone (DSi, polygonal remake, 3DS eShop release of original).
If you have a 3DS ... you can literally buy the sprite-based and polygon-based versions for $25 total. DSi was unfortunately delisted when the eShop sprite-based 3DS version came out. It made some use out of the touch screen as a map. Unique in a way.
The stereoscopic effect on the sprite-based 3DS version is really good and the game is presented in widescreen format.
GameStop reprinted the 3DS physical release and you can buy it off of their website used for $15. eShop has the digital sprite-based for $10.
but yeah, you look at games like Blaster Master Zero, Kamiko, Shantae, Mighty Gunvolt Burst, Shovel Knight ... they're all priced less digitally. You can argue subjectively on which is better or worst but they're all cheaper than Cave Story.
Even Sega knew that it would be a tough sell to price the digital and physical versions of Puyo Puyo Tetris the same. They did mark up the physical version $10 over the physical PS4 version but padded it with sticker and keychain bonuses.
I don't expect price parity with everything physically or digitally but games like Puyo, Isaac, and Cave Story play up the physical extras as padding to justify the price that totally isn't there with the digital release.