On the other hand, you _will_ have to have the disc in the drive to play a game which will actually be entirely installed on the box, and you won't be able to resell downloaded versions.
I think Microsoft is missing a trick here. It might have been more complicated to keep the new options for downloaded games, which treating physical versions differently, but it would have allowed MS to support people who don't have broadband (or who want to keep their disks for the long-term), while also moving smoothly into the future and offering options to download-only games players that they don't currently have on any other platform. Imagine if they were able to boast that they could do everything that the PS4 could do, everything that Steam can do, _and more_. That would really be worth boasting about!
(And also apply some pressure on Valve to allow resale of games.)
If I was to guess why they weren't doing that, it would be that they wouldn't be able to get sufficient buy-in from the major publishers. I suspect that they got the publishers to agree to let downloads be resellable only by moving to an (effectively) entirely download-based system, whereby people wouldn't be able to pirate physical copies of games at all. Once they back-tracked on that there was no way that the publishers were going to be happy to allow more flexibility over download licenses.
Original post on Dreamwidth - there are comments there.