The challenge is this:
There is a back-end data exchange between Star Carriers on a regular interval that shares the FFP numbers of each carrier's current *S and *G members. This data from all Star Carriers is stored in each carrier's database. This is how SQ knows that the UA number associated with your booking is currently "worth" Star Gold, and prints UA*G on your boarding pass.
The question is how often and when each carrier checks a stored FFP number against such a database, i.e. only when the PNR is created or also at check-in?
And crucially for this discussion: Does the airline validate a boarding pass against its records when you enter a lounge? It is hard to manipulate the data the airline has in its systems, but it is easy to manipulate a boarding pass barcode so that said code claims you hold *G status. If the lounge entry system just reads the BP and does not validate it against the back-end, you have just managed to illegally enter a lounge.
Hence presumably the insistence on a physical card...