Tunecore can get a CD made for 1.28 shipped and that is for just 1000 CDs you can get better pricing on larger quantities. iTunes IIRC charges 9.95 for a Digital Album and takes 30% so yeah basic math shows us an Indie can undersell iTunes and still make more money on a physical sale of a CD.
Now that you have those CDs, you have to market and sell them. That is not a trivial thing. Self-produced CDs are NOT easy to sell. There are costs attached to marketing and selling. I would be willing to bet that it will take months or even years to sell 1000 CDs for most Indys because they have to do it retail. Getting them into a retail chain is almost impossible. Selling them one at a time requires you HIRE somebody to stand there and sell them at a concert venue. Now you have minimum wage plus benefits to contend with. . . in multiple venues. That requires an accountant to keep track of. Your costs escalate. Doing this on a one-off is not where the big bucks are for your average Indy.
Making money through streaming is a better model. The indy receives a check in the mail once a month, once a quarter and carries it to the bank. . . or it's direct deposited. Done. He or she can concentrate on making music not running a business selling CDs.
Finally, WHO USES CDs ANYMORE?