Piracy is horrible, I understand that. I understand that there should be measures taken to minimize, if not eliminate it altogether. But is it wise to penalize and punish the market for something of which not everyone is guilty? In an industry as competitive as gaming, where trends are driven by the market, would it even make the slightest bit of sense to make the experience worse for a very picky audience? Honestly, all that does is encourage people to go ahead and pirate the shit out of your games and buy the other guys' games. Leading with the stick over the carrot can't be good when there are multiple carrots to pick from.
Also, if you can recall, the same damned rumor popped up in 2005/2006 when the PS3 rumors stared rolling in. They said the PS3 will write a code onto your Blu-Ray disc to prevent it to be played by another machine. What a crock of shit that turned out to be.
This is how I see it going down. All console manufacturers are going to incentivize gamers for buying games original. They're doing it now with exclusive DLC codes. Battlefield 3 came with free DLC (which I have yet to download) if you pre-order it. Batman Arkham City came with Catwoman if you buy it original. If I'm not mistaken, Red Dead Redemption did, too, through pre-order.
Companies come and go in the video game industry. They need to stay relevant and they need to keep innovating. That is the bottom line right there. Nintendo has proven it time and time again - they've never been the most cutting edge or the most sensational. What they do, though, is make awesome games and innovative consoles. It helps that they've never been jerks to their customers. As gamers, we recognize companies' need for revenue. But the only way you can get our hard earned money is by making great games and by giving us a good reason to go legit.