Honestly Microsoft? Make it so you DON'T have to install every game to the HDD. This requirement is what's making the DRM necessary (or vice-versa I suppose). Include a code with every new game. That code lets you install it to you hard drive once to use without a disc. If you buy a game used or borrow one, you have to use the disc or you can buy the code to install it (say $20, I would gladly pay that on top of the used game amount to not have to switch discs). People get their used games, rentals and lending and publishers get a chunk from the money from code sales.
I think the installation of every game is down to the limitations of blu-ray. PS4 is doing the same thing right?
Your code solution doesn't work. People would buy a game, install it with the code and then resell the disk. Or give the disk to a friend. Essentially every new game purchase would provide 2 copies of the game.
The only real way out of this is to require the disk be in the tray. Plenty of people wouldn't mind that, but then again plenty of people would be annoyed that every game must be installed, taking up hundreds of gigabytes on their hard drive, and yet they must continually switch disks to use them.
So if Microsoft isn't willing to enforce "disk must be in the tray" (I doubt they are, and personally I hope they don't), all they can really do is tweak the amount of time the console can stay offline before phoning home.
It sounds to me like that check only has to be reasonably frequent because Microsoft is going to allow used games in some way. Since there is obviously going to need to be license deactivation to facilitate this there needs to be regular checks to ensure your licenses haven't been deactivated. But if Xbox One was to abandon used games entirely the system could have a prolonged offline mode, and it would pretty much be equivalent to the way Steam works.
So really it's about trade offs.
Constant disk switching despite having a hard drive full of games, but with no DRM
VS
No disks required, but has online DRM.
And within the DRM option:
Long offline mode, but no used games (essentially Steam)
VS
Used games possible, but quite short offline mode.
For me personally it feels like they took the right options, with a short term outlook. Long term, when the servers go down, is a bit of a worry though. It also feels as though if they were listening only to publishers without concern for consumers that they would go the no used games at all route.