Why do people still use Crunchy Roll or centralized media distribution/streaming sites?

Simple: it’s much easier and requires no effort on your end. Also, because people want to pay for media.

You can build a better library with a VPN, some good Torrent sites, and about 2 TB of storage.

This requires quite a bit more effort, especially if you just want to watch on your TV or phone.

Good torrent sites are pretty annoying to find tbh. There are online resources, but they’re harder to find compared to streaming, especially private trackers.

Storage is very expensive. A 2 TB NVME SSD is like 4-5 years worth of annual Crunchyroll subscriptions. About 2-3 years for HDDs.

2 TB might also not be enough if you want the quality Bluray rips.

You’ll have better quality

Only if you download the Bluray rips, sure, but these take up quite a bit of space and don’t exist yet when you’re wanting to watch the current season or previous 2 seasons. Those rips are at best the same quality as the streaming service. And if physical media will really stop, you’re own library will be the same quality or slightly worse than the streaming services, since the source of the better quality is gone. I have my own Jellyfin server (mostly for my own Bluray rips), but I still have a CR subscription for this reason.

won’t get ads

If you use an adblocker or pay for a subscription you won’t on streaming either.