Yesterday I mentioned a petition against the closure of National Archives of Australia offices. One reply suggested that instead of closing offices to save money, the Archives should stick to paper storage and not digitise records. I am not sure that would be cheaper, nor give a good service.
Most new government records are "born digital", that is they are first created in a computer, not on paper. So to store them on paper would require an additional step of printing them out. Apart from the cost of the paper and printing, there is the storage of the records and handling.
A one terabyte disk holds the equivalent of about 10,000 reams of paper. The paper would take up about 100,000 times as much space as the disk (40 cubic metres as compared to a pocket size device). Also digital records can be shorted and sifted electronically and moved about automatically.