They can still make family sharing and stuff work.
Here's what I think MS should do.
When you put your disc in, a message pops up:
Do you want to register this game to your account?
Then it lists the features people get for registering the game, and also the cons (no trading in the game, etc)
People who choose to register the game can then get access to family sharing, no disc swapping, etc, etc.
People who choose not to can trade in the games.
I expect companies will do online passes for the Xbox One for the people who buy used copies, though (and I'm sure the PS4 will also have some sort of DRM for companies that want it).
Also, people will have the option to register their disc any time they want, as long as the disc has not been sued on another console (to prevent people from registering used games).
Then, slowly start transitioning people to digital-only.
Offer sales, price drops, and tons of stuff for digital games. Eventually, I can see the Xbox One going from discs to codes that you can order in stores.