Of course they were virtual cards, that's what a "Magic: The Gathering Online" Exchange would be.
I think the confusion is that some people parse it incorrectly as "Magic: The Gathering" + "Online Exchange" rather than as "Magic: The Gathering Online" + "Exchange", so think that it was (planned to be) an exchange for physical rather than virtual cards.
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The best part about that joke is there is no remotely convincing evidence that the site ever actually was a playing card exchange.
Assuming a (presumably incomplete) scraping by archive.org is "convincing evidence", it was originally an exchange for virtual trading cards.
https://web.archive.org/web/20070525044536/http://mtgox.com/...
Of course they were virtual cards, that's what a "Magic: The Gathering Online" Exchange would be.
(But actually MTGO has it's own de-facto virtual currency - tix - which are regularly traded for cards through the MTGO interface.
I think the confusion is that some people parse it incorrectly as "Magic: The Gathering" + "Online Exchange" rather than as "Magic: The Gathering Online" + "Exchange", so think that it was (planned to be) an exchange for physical rather than virtual cards.
Which is 'in beta' and never had anything else on that home page.
It's just a placeholder text.
Irrelevant. The joke is that they're such a bunch of incompetent goofballs that they couldn't be bothered to change the name.
there is plenty.