It could have been nice if we could have Bitcoin in its physical form(paper) so that we can be trading with it while collecting change but this is against the actualization of Bitcoin being decentralized, A\accepting it as legal tender is somehow related to this
Bitcoin in paper form is not good for trading, since the creator/holder have access to its private key, the possibility of fraud and scam is likely to happen. Imagine you received a physical Bitcoin with an amount of 0.01 BTC as payment for your goods, then right after receiving the amount, the bad actors sweep the Bitcoin to that address. The merchant then is left with just a physical form but the amount on the paper Bitcoin is removed by the scammer and put it on another paper Bitcoin and do the same thing over and over again.
This is one scam scenario that may happen if we do the thing you stated. So Bitcoin in physical form is susceptible to fraud and scams.