The decreasing reliance on the need for physical media will probably torpedo the used game market before always on DRM will.

This all seems like linkbaity rumor to me, Microsoft doesn't really have a business case to go to always on DRM and risk turning off a segment of their customers (some customers won't care and would buy regardless). I don't think Blizzard or Ubisoft would consider not building for the XBox platform if Microsoft refused to support always on DRM so Microsoft isn't beholden to the game studios.

Possibly, though I assumed they were just going to get around that by removing the optical drive from the next generation consoles and selling all of the games via xbox live.