True, forgot about that. But even then, it's a very small aspect of it--and the initial risk for the average user was tiny. Steam was asking that your 9.99? (I remember the initial price being really low) game might suck. MS is asking that your 500$ system, and hundreds of dollars of games, might become paper weights.
All in all, Steam didn't get commitment until it proved the benefits behind it's service (Notably huge, ridiculous sales.)--and I'll bet any amount of money if MS had released Xbone as a normal system first, and then offered deals like steam did, for people to "buy DRM"--people would have bought the DRM products because it was being sold with it's benefit first. So for example, if they gave people the choice between buying a non-DRM 59.99 game, and a 39.99 DRM/Digital version, I'm willing to bet, overtime, they could win most people who aren't Sean over to the digital side.
But MS is so insulated and disconnected that they simply assumed the consumer would trust them to bring the benefit after accepting the risk. And the thing is, human rationality just doesn't work like that--risk aversion is a huge aspect of market sales.