It's a good question. Maybe something with interstate commerce laws?
That loophole got closed once inter-state data sharing became possible and Oregon merchants were required to start collecting those out-of-state taxes at the point of sale.
It’s called a ‘use tax’. In practice, nobody pays (personal) use tax, myself included.
Washington has a use tax: https://dor.wa.gov/taxes-rates/use-tax
California has a use tax: https://cdtfa.ca.gov/taxes-and-fees/use-tax/
Idaho has a use tax: https://tax.idaho.gov/taxes/sales-use/use-tax/online-guide/
So, all of those people going to Oregon to shop without sales tax and not paying use tax were technically breaking the law, not using a loophole. I’m not judging them, I don’t pay use tax either :)
I understand it used to be possible to show ID in store and have sales tax not be applied, but now you need to submit receipts and etc.