I suppose they wanted a method where you would continue to require the disc be present, because physical discs have just become another method of DRM anymore - there doesn't even need to be a game to be installed, it's just like key for car - you just need it to start it up; everything else has gone full digital anyway.
MadMummy is correct - there is absolutely nothing preventing MS (or anyone else) from recognizing a disc bar code or any other physically defining characteristic, really. If you have a unique serial code (i don't know if there is one visible on a disc, like a serial number, or even one digitally available on a disc) you could even do a one-time link of that disc to an online account.
But no, let's just use an external drive. The only surprise here is they didn't make a proprietary external drive a requirement, so they could license more hardware sales.
