I won't waste time continuing the argument over all of this, as we have a clear difference of opinion, but I will respond to one thing.

If Sony and MS both do it, and sales of their consoles are dramatically down compared with Wii U, the first thing they'll do is a significant price cut, and hope that it solves the problem. It won't, in this case. By the time they go "we'd better drop the DRM", both systems will be stigmatised, and third parties will already be moving their development across. And dropping the DRM will only serve to further justify their shift towards the Wii U.

Anyway, if MS were smart, and this wasn't a push to give more power to publishers over consumers and to restrict used games and profit from used game sales, they'd go "you get one install-play from a disc, you must have internet connectivity to play an install. You may alternatively play with the disc in, in which case there's no internet required except for online functionality, and online functionality is restricted to one instance of the licence". It would mean that there would be NO internet functionality required for playing the system offline, but you would lose the ability to play without having to put the disc in.

Given that they're talking about allowing multiple people to play using the same license in the same way that iTunes does, this would be a no-nonsense solution. But I'm telling you right now, it's not going to happen.