The information is stored at the top of the disc. When the pages of the binder rub against each other over time, it wears on the disc eventually causing chunks of information to be rubbed away with it, making holes (or disc rot) in the information.
This is pretty well known. Not only do I have personal experience with it from the music CDs I mentioned, but you can Google "CD binder disc rot" and find plenty of other people that have posted about the issue.
top information storage is correct I'll give you that but the top part of a disc scratches allot less. That part will not even receive visual damage from a disc wallet, bottom side is allot more fragile than the top in terms of scratches etc. maybe if some sand is inside the disc wallet.
As far as top side scratches go you have to put some real effort to damage that top layer of a disc especially of console discs wich also have a layer for some disc art aside from some protection. Maybe with normal copy discs, early dvd's or music cd's but otherwise not really something to fear about. you cannot compare all discs to console game discs, console games are allot more sturdy since they have to last unlike dvd's or music cd's
Also that issue that you mentioned isn't disc rot, i could just scratch the top side of some of my discs to remove data layers and render my games unplayable, I would say physical damage but not disc rot, disc rot appears without scratches but thanks to some chemical reactions without any traces of phsyical damage over time. cold or hot temperatures could increase the chances of disc rot appearing faster.
You can't confuse disc rot with physical abuse if I read you info correctly two totally different things.