The ISU Council apparently didn't think it was safe enough to hold their own meeting in person, but decided it's safe to run an in-person event with way more people involved, and in closer contact.
It's very easy these days to hold a meeting virtually. The social aspects of a live meeting might not be able to happen, but the actual taking care of business can happen almost as seamlessly by Zoom or similar platform as by gathering everyone in the same physical room.
For a skating competition, the actual scoring of the skating happens with judges and tech panel in the same room as the ice where the skaters are skating.
Yes, it is possible to judge skating on video, but there are some important aspects of the skating (mainly having to do with PCS) that are not at all easily perceived on video, so the results of a virtual competition would likely be different from those of the same competition held live.
In addition, working out the logistics of a virtual competition would require developing new procedures to create as level a playing field as possible. We saw in the US (and Canadian?) events that skaters had different situations of ice time available to them -- size of the rink, quality of the ice, whether they could get the ice to themselves or needed to share with other skaters -- and quality of videography, etc. There would also be a need to ensure that the skater performs each program one time without stopping and that videos of the official performances are not edited before being submitted.
It's one thing to use such procedures, as developed this year by some member federations, possibly with some new details, for purposes of gatekeeping/qualifying who can participate in the big event.
But using a virtual format for the big event itself would result in a completely different kind of event than the usual yearly Worlds (or whatever event we're talking about).
It may turn out that it will not be possible to hold this big gathering in person after all. If so, I don't know whether the ISU has a backup plan to offer a virtual event in place of a second consecutive canceled Worlds. But even if they do, it won't be "Worlds" in the same meaningful sense that a virtual meeting can easily replace a live meeting.