It’s worth it if you can get it for cheaper than an AYN Thor, and always worth it if you have anyone you know who also still uses a DS/3DS because of local wireless multiplayer.

The tradeoff with a Thor (or the couple of other ds emulator handhelds) is that you lose out on local wireless multiplayer (emulators might eventually support this in the future, they only do WFC via WiFi at this time) and the specific hardware gimmicks of the 3DS (3D, stereo cameras, perfect input latency, etc.) but you get access to GC, Wii, WiiU, PS1/2, PSP, Switch 1, and Steam/PC games.

What’s the reason behind its sudden resurgence despite it being an “old” console as the Switch lineup has replaced it?

This is gonna sound like nostolgia glazing but really the DS era was Nintendo at their finest and the absolute gold standard of handheld gaming and a serious platform for handheld technology of the time. Stuff like streetpass could have easily been utilized for some amazing technology in other platforms like smartphones. The 3DS gets access to all of that + its own 3DS library of games, which is why its the most optimal console to buy.

95% of that library will never see the light of day again because they relied on the specific hardware the DS/3DS offered, the main one being the two screens. It would be impractical/impossible to remaster most, and Nintendo is still wary of attempting to emulate even a handful for their virtual console due to the aforementioned hardware and a bunch of PITA development required to make it work well (see the MelonDS forums of how long its taken to get to a solid state).

It’s been in high demand ever since they ended production because of that reason, and it continues to climb due to limited supply.

Does it have to do with physical game ownership?

No, you should homebrew your 3DS to make it incredibly more viable to use and everyone uses big SD cards to hold all of their game ROMs and data.