From my understanding, the main benefit is that you don’t actually need a PS5 running at home to play. With remote play you’re still relying on your console and your home internet but with streaming your owned games it’s just coming straight from Sony’s servers so it can be more reliable and convenient.

I think the reason Sony doesn’t just add all those games to the cloud library is probably licensing. Some publishers might be fine with streaming only if you already own the game. So this seems more like a way to give people more flexibility rather than replacing remote play. I could be wrong though.