They did this in California, now online stores in California only let you rent games for an indefinite term. Exactly the same as before but the button says "rent"
Not really. As long as it's clear that everything is a rental, consumers are free to go along or not.
Physical media offering near-permanent storage is also relatively new. 8-tracks, cassettes, and even CDs would wear out over time. Yes, I could hold a cassette in my hand, but I also knew it would wear out over time and I'd have to buy another one - and I did.
We need to change our language around buying something so it's clear that it's not permanent ownership, unless it really is. I suspect we would see services/media start to come to market that offer true ownership if the demand was there.