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.
EDIT: Bethesda has confirmed that only the PC version won't include a disc. Physical versions of Xbox will include a disc. Whew.
That was a valid argument, but in the days of 40+ GB day one patches and the likes, I firmly believe that the disc will become useless as soon as someone decides to kill the servers, usually ~5-10 years down the line depending on the success and popularity of the game/franchise.
Case in point: My physical copy of Overwatch.
Man, I still get pissed off whenever I remember what was promised in regards to Overwatch 2 and what was delivered.