This means you can't pass the game around to your friends or sell it afterwards, which completely ruins the purpose of physical media imo. I mostly play PC these days so this doesn't affect me, but it's a disappointing direction for console games. At least they could've used an empty disc that has proof of ownership.
My issue is less being able to share the game, and more on preservation/ownership of the game long term. Discless physical copies means if for any reason the server that offered the download for the game goes down, you're out of luck unless you pirate it, even if it's a game you bought on release and just want to play again ten years later.
Don't worry, Todd Howard has your back and will give you the opportunity to rebuy it on the next Xbox /s
Also Todd Howard asks that you buy one more skyrim at this time, please