It's one of those ideas that's extremely cool in GOAL ("make it so you don't have to swap discs, ever!") but the limitations that must exist to make it function ("what's to stop someone from installing a game and reselling the disc?") aren't really worth it, and Microsoft thankfully backed away from it several months prior to launch.
I think a lot of people are like "bah, anti-consumer," and I don't really feel it qualifies as that, because it's not trying to be. It was them honestly trying to do something really cool for consumers, but they couldn't figure out how to get past it.
I remember hearing one discussion that was like "okay, so, what we could do is include a physical code with every game, and selling the game also means revoking the installation code," but the issue there was that you'd have to give people access to Microsoft's servers, and Mom n' Pop game stores would likely have to go through hoops to make that happen, because an authorization/de-authorization would be a painful/irritating process.
Installing a game to not require disc-DRM is a great idea, but there are just too many negatives to ever work. And they didn't even ship with the functionality, so being mad at them for doing something that never make it to market never made sense to me. Digital sales has basically rendered that discussion moot; if people don't want to deal with discs, they'll just buy digitally. And Microsoft gets more of the cut there anyways, by functioning as the digital retailer.
If you've been watching MS for years, you'll find they're one of the most fascinating tech companies on the planet, but the corporate management philosophy kind of works against itself. One of my favorite MS concepts was the Courier, for instance, which, I think, would have blown tablets away had it made it to market first, but it got canceled. They do a ton of amazing/crazy stuff. Their "vision of the future"/AR universe stuff is remarkable.
I think they hire a lot of really smart people to make the future interesting.
The problem is, gamers really just want to be boring. They want things to be how they've always been. Playstation is the most boring, generic, uninspiring platform on the market, and so it's the most successful. Titanfall is epic sci-fi action, but people want boring, grounded modern military stuff. People like the mundane.
What Microsoft needs to do is figure out how to deliver the mundane, then offer iterative features that excite and delight. And I think backwards compatibility has done that. Oh, sure, plenty of consoles have HAD backwards compatibility before, but Xbox One backwards compatibility is digital, and that's where it really shines. You can manage your X1 and 360 libraries together in a really smart way, and because they're dropping new games weekly, you can often sign in to find you've got new, free games.
I really wish Microsoft would quit the Xbox One branding scheme and make Scorpio Xbox 4, but I get that they want to make sure that generational shifts are fairly simultaneous to avoid a Dreamcast scenario. If they were really smart, they'd just ignore the concept of "console generation" entirely, and just go the PC route they've been hinting. Make everything always available on future iterations of the hardware, using Win32 or UWP. Then there's no such thing as backwards compatibility, and the idea of console generation becomes moot.
