I honestly don't think it's about "helping fight piracy," at least not directly. I mean, yeah, not being able to use a burned disc will cut down on piracy, but you know it's only a matter of time until someone figures out how to mod these things with a chip or something. We've seen these kinds of restrictive DRM methods before and they always end up being cracked. Hell, anyone remember when DVDs were "impossible" to rip because of CSS? Yep. Right up until DeCSS came out.
I think this gets used games out of circulation because (A) the console makers think it cuts into their profits (legitimately, not from the piracy angle alone), and (B) I think it "preps" the market to move towards streaming-only, which will be advertised as a feature, rather than a lack thereof.
Look, we already have Roku boxes, Tivos, streaming Netflix, so, what's to stop someone from eventually streaming games? And I'm not talking about Xbox Live Arcade, either, where you download a copy and play it off the system. Oh no. I'm talking about the game itself constantly streaming. No (or at least minimal) client side storage.
I'd bet we're a generation or two ahead of that, but mark my words, it will happen. The guys at Napster 2.0 were visionaries in that sense. Netflix Instant and On Demand are the tip of the iceberg. And since it's all just data, why not? It keeps everything resident on the company's servers, gives them far more control, and you can even sell it to folks as a subscription service where each individual game costs less (or nothing and you just pay for access to the marketplace), and people actually feel like they're getting a bargain.
This is the direction entertainment media is headed -- away from the "ownership/licensed" model where you have a license to the content of the disc/tape/record/book, and ownership of the physical thing on which the licensed material resides....to straight-up licensed model where you get access to stuff, but you never actually own any of it. And you know what? People will go for it. If they went for Pay-Per-View, they'll go for this, too.