Its rather simple to me DRM can coexist with offline physical media.

1.Normal disc protection.
2.Install via CD key and phone in automation system where you punch in the numbers, or online activation.
3.If activated online the disc protection is removed.
4.Install limits are 10 install tokens for the online activation and phone system(key+phone passcode = 1 token), when you uninstall you may get a token back by sending the information back to the install server.

Now we can enhance this offering a dailup friendly passcode website that gives you the phone passcode and lets you register for news and tokens and ask for email support, you may also use this to revoke a install, when you uninstall ti will generate a text file and you can use the number in it to get a token back.

if you have board band the normal online activation system would handle all this.

This is a no brainier, without this the current systems damage both consumer and resaler rights.

This also allows publishers to put al tier games under one account and let users manage their games for the coming years.