It feels like some DfT diktat to reduce TVMs and push people to e-tickets/contactless.
No; up here in Yorkshire, the vast majority overwhelmingly choose e-tickets.
I've spoken to several Guards on various TOCs, and generally speaking I'm told that the take-up of e-tickets is around 95 percent, or more.
Hardly anyone uses paper tickets up here, and of those that do, they are generally the flimsy till roll style tickets with barcodes; either Rovers/Rangers that can't be issued online, or a
very small minority of passengers who choose to visit ticket offices.
Credit card sized ticket stock tends to be almost exclusively for flows which require such tickets to be issued, e.g. tickets that extend beyond London.
York used to have a huge Travel Centre, with many windows open, and huge banks of TVMs inside and outside the Travel Centre. Now the Travel Centre is a Sainsbury's; the replacement ticket office is absolutely tiny in comparison, and the number of TVMs has absolutely plummeted.
Despite there being vastly fewer TVMs nowadays, there is no prospect of queuing now, which wasn't always true when there were dozens of them back in their heyday!
...TVM/CCST use to be "stubbornly high" (due to Cross London, Travelcards and on the day travel...
Exactly this! The vastly higher usage of TVM/CCST at places like Croydon, compared to (say) Yorkshire, is because of various factors such as cross-London, Travelcards etc.