Why? Because there is a long history in the second circuit, and indeed federal caselaw, of considering computer data "intangible", which conflicted with the criminal statute in this case which required that any material stolen be copied into a "tangible medium."
Here's where the weirdness comes in: Many of the judges in the history of "tangibility" with respect to data have simply asserted in a bare sense: "computer data is intangible" or that the "digital form" is intangible.
When we work in intellectual property, we inevitably deal in the interface between intangible "ideas" and their fixed media of expression; Copyright law, for example, protects not the idea but the fixed expression of it, and the derivatives of that fixed work. Patented technology must be fixed in a claim format. The intangible is the transitory, nebulous idea of the idea, before we write down in a filing what we're actually laying claim to.
Computer data, therefore, is not really "intangible". You have ones and zeros in a series that represent a tangible, immutable idea; moreso, these ones and zeros are fixed in position in real life.
There's this idea that somehow, the precedent set by the judges does not really recognize how "tangible" data actually is.
For example, no court would contest the tangibility and written nature of a contract written on a cocktail napkin. This is a classic law-school problem wherein a requirement that a signed writing is fulfilled by a sharpie and a small cloth square. But a cocktail napkin and a hard drive are not actually all that different: using a specialized writing head, the surface of the media is made to reflect electromagnetic radiation differently in order to encode a message. The fact that a hard drive does this at a smaller scale and outside the visible spectrum is an entirely arbitrary distinction.
Why is it arbitrary? Because nobody would contest that microfilm is tangible: smaller scale, needs specialized hardware to render the data in a visible manner. And yet somehow, according to our caselaw, when it comes to data encoded on hard drives, it leaps outside of the realm of reason and becomes equivalent to the IDEA of data rather than real, immutable, fixed data.
Patent law has a similar issue with the old precedent in In re: Nuijten. The case stands for the proposition that "signals" cannot be patented because they have no "concrete tangible physical structure".
Why aren't signals concrete, tangible, and physical? Nuijten argued that signals by their very nature make an impact on their receiver; by definition, a signal communicates information along a medium by changing the physical properties of that medium in some way. Whether those changes are vibrational as in sound, electronic as in wired or wireless electromagnetic transmission, or chemical or some other type of change, people having ordinary skill in the art understand what "signaling" can comprise and how to implement a particular signal format in a given medium.
"These definitions address “articles” of “manufacture” as being tangible articles or commodities. A transient electric or electromagnetic transmission does not fit within that definition."
In re Nuijten, pg. 16
Again, we have the bare assertion that somehow electrons don't count as matter, don't have a real impact on the world, and can't in themselves be useful articles and commodities.
And this gets to a pet peeve that I have with the state of intellectual property law. The lack of respect for Electronics and Computer Science as a field is appalling. The number of times I've heard otherwise-intelligent practitioners stand up and ignorantly declare that they'd rather have something they can hold in hand truly depresses me.
It's the fastest growing field of technology in the modern world, a multi-billion-dollar industry, and yet we stand up and declare that corporations are cutting million-dollar contracts over the production of abstract ideas.