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Personally I can't see it happening just because MS are normally a company that is open in terms of using their products. I don't think they will want to limit themselves, especially in the current financial climate where people can't afford to spend £40 gambling on a game. Because there is no gurantee that your like it.

Plus in the UK I imagine this would break re-sell laws.

I think the next gen will go fully download tbh anyway. Net speeds are so fast now that it wouldn't take long to download a game anymore. If they started making download games a lot cheaper then physical copies then there would ne no need for discs. Look at steam, I really hope Sony and MS copy that for next gen.

However IF it is true then there is no chance I will buy one. Limiting what people can/cannot do is not the problem. They need to realise games cost a lot to buy. If they were cheaper the second hand market would be dead just as selling cd's or dvd's is.