I'm not sure why you think that I'm surprised, or even why you think that I disagree with your overall argument. I'm just trying to help you build your argument by pointing out the most obvious aspects which need more careful elucidation.
So your claim is that in the physical world strings are more fundamental than trees. Good to know. In fact I think there's an even simpler reason than the one you give of "entropy". That is, trees require space which grows exponentially in their depth, and thus they can't even be represented in the physical world.
A string is quite different from a stream. A string is typically considered random access, for a start.