... but I wonder why people wouldnt play a game because of that.

True... I don't see a reason for that either.
Isn't this the case with most PC games, that you need the game-disk in the drive?

Well, some games do require it, others do not (Savage for example). Or get patches that remove it latter. (UT2004 for example)

Since I swap between a fair number of games, and I have a tray-cd/dvd/rw-rom, its a huge annoyance factor to have to switch cd's.. especially when I have the full game installed on my computer.

Hope you remove it in a latter patch hehe

Regarding unlicensed distribution/gaming (a.k.a piracy): Most games that are available as 'warez' did require the cd-in-the-drive, but that did'nt stop anyone.