What's interesting is the staunch difference between Diablo III and SimCity. Originally, Maxis/EA attempted to pass off that SimCity was a lot more like Diablo III, but we eventually found out that was not the case. Diablo III only suffered from its "Error 37" for maybe about 12-24 hours, and no features were removed from the game to support server stability. (There were features delayed prior to launch though such as the AH and PVP.)
In other words, apart from server maintenance, Diablo III has been a fairly rock-solid experience... or at least that's how I remember it as I played from launch. Of course, that isn't saying anything about the quality of the game itself, but that's not in question here.
What stuck out to me when I read this is... who says that piracy is really a problem on the consoles? I'm not saying that it doesn't exist, but is it really as large of an issue? I would also put forth the idea that a good online system helps to weed out these nefarious types by detecting them or simply making them choose to not chance it. For example, do you want to hack your 360 and chance having your entire XBOX Live account banned?
Honestly, I don't see them pushing people toward always online, but I do see them pushing people toward digital downloads. Digital downloads cannot be resold (except maybe in the EU eventually?), and you avoid excess retailer-related costs (packaging, distribution, etc.). Also, by associating content directly with someone's specific identifier, you add more risk as to whether cheating/stealing is worth it. For example, if you check the PC section, you will see people warn against using shady key sites because "you don't want your Steam account banned." Why is that? Some people have hundreds of games on their account, and a banned account means you lose access to all of your games.
If I had to guess, the idea of "always on" would refer to the console having a low-powered sleep mode where it's able to wake up to do certain things. This is especially necessary if it wishes to become a staple in the living room, which is something that Microsoft has been inching toward. It will also allow it to be like the Playstation 3 and upload game saves or download updates.