I think that a part of our obsession for pure on-chain art stems more from trauma and fear caused by private companies, with narrow profit-oriented goals, shutting down than artists not maintaining their work throughout their lifetime and not enabling their collectors to participate in that process.

Photographic and /dynamic-art. Punk #641 https://work.figure31.com/

The market is currently divided because some institutions and entities clearly emphasize on-chain maximalism, yet others seem unbothered by even holding the artworks they collect themselves or engaging with the underlying tech. There's a non-deterministic relationship between price and on-chainness (for now).

In the end being on-chain or not really comes down to the artist's intention for a specific oeuvre. I don't think it's satisfactory to just say it has to be on-chain and if it's not its a lower-grade expression.