That may be one way of seeing it, but only in a vague philosophical sense. The significant property is that cryptocurrency is peer-to-peer, free of counterparty, so users do indeed expect (rightly) that they have it "in their hand" if they receive funds and that the beneficiary has it "in their hand" if they transmit them. (Hence the term "bearer token").

Technologists will no doubt  continue to argue that systems like the Lightning Network are simply solving a technical problem and that there's no impact on the fundamental nature of the monetary medium from approaching it in that way. Coders are conveniently liberated from the constraints of monetary design because to them it's just another task in software space to be solved, so they solve it the way they'd would any other similar problem that passed beneath their noses. Thats why you end up with car crash solutions that totally miss the point of the original invention.

Have a read of the chapter in this document entitled "Open loop payment systems with instant availability of funds". The distinction between a monetary medium that separates the settlement layer from the transaction layer, and one that doesn't is adequately made there. Even the very first paragraph "What are instant payments ?" supplies a convenient definition that everyone can reasonably work with, but when you apply that definition to Bitcoin, it ONLY applies to the Lightning Network, not to the Bitcoin blockchain because bitcoin is going down the road of fiat by separating the transaction and settlement layers.

I'm not saying thats any kind of disaster. It's the obvious thing to do if you've decided that the protocol is "out of bounds" for further development.

I'm just saying people should be honest about what it is and what it isn't and stop pretending that these technologies "scale" bitcoin in anything other than a pseudo-authentic way that does not necessarily do justice to Satoshi Craig's original vision of an instantly transferrable, anonymous, peer-to-peer tokenised asset.