A. Because that's not what people are used to and that would still make used game sales and rentals nigh impossible.
B. Because there wasn't originally going to be on-disc licensing period.
I mis-worded it. What I meant to say that it would require new, additional engineering to change their disc process. It seems much easier to make their software ignore the on-disc licensing.
To address (A) I'm not sure I understand. What I was saying that instead of engineering a physical on-disc licensing solution in the first place (back when they were on the DRM trail), they could have just gone with the tried and true key-in-the-box solution. Hell, they could have made it a QR code for the Kinnect to scan. It seems like a lot less work than some sort of physically-based solution.