I understand the sentiment of your argument, Jim, and I agree with that sentiment (that on-disc DLC is not a good idea). However, I find your particular argument presented here to be a little weak.
We know that both on-disc DLC and day-one DLC create the perception in the buying gamer's mind that they are being ripped-off, because they feel that they are being charged extra for content that should already be included (in the case of day-one DLC) or immediately accessible (for the case of on-disc DLC) as part of the basic game for the $50-60 being paid upfront for the game. Essentially, the extras feel more like goods being withheld for ransom rather than actual extras. This is a perception problem created by the publishers simply because they don't know how to play cards.
The first solution is to let DLC actually BE DLC. Do not include it on the disc. Issues of compatibility is not a good excuse for on-disc DLC. It is the actual job of the game developer to figure out a way to design the game with proper modularity such the DLC does not have to be present for the game to function in a heterogeneous online environment. If this is not possible, then the developer should consider discarding the notion of DLC for that particular game or discarding the online nature of the game. In either of those cases, sell the game as a complete package, with all content accessible at time of purchase.
Additionally, on-disc DLC leaves publishers vulnerable to hackers who can unlock the on-disc DLC without paying for it. Considering how much publishers are screaming about losing money to pirates and hackers, you would think they would have foreseen this issue.
The second solution is to let DLC actually BE an after-market, value-added extra. Specifically what I mean by this is to not juxtapose the release of the DLC with the release of the base game. Actually wait 3-6 months before releasing the DLC. Even if you have the DLC complete and ready to go the day the game is released, don't release it then. Gamers don't need to know or even have any guesses how long you had to work and slave to make the game and the following DLC. Let them believe that you were working your ass off all this time to give them something special; it's all about perception.
Unfortunately, this does break-down some because publishers have been too eager to blow their entire wad every time. Now that gamers know how long the DLC really takes to make and when it's ready, any delay will only cause gamers to be more disappointed if the DLC is in any way lacking in volume. So, publishers have cost themselves a significant time and resource management opportunity that could have gone a long way toward building customer loyalty by better managing customer expectations. Now, that opportunity is lost.
The basic essence of what I'm saying here is that publishers really need to learn to play cards better (you never play your entire hand at once, and always hold onto that one card for "emergencies" or the end-game win). If publishers would have held on to the DLC and doled it out, piecewise, over time, they may have garnered better perceptions from gamers regarding the value and monetary worth of DLC. Also, the delay would have given them time to make further refinements to the DLC, for which they could have made reasonable justification to charge even a little extra. Then, establishing a pattern of quality DLC within a particular time-frame after the game's release could have ensured better gamer loyalty, as gamers hold onto their money to spend on the DLC rather than jumping to the next over-hypered hit release title from the competition, and a potentially more steady revenue for the developer and publisher that would have easily mitigated issues with piracy. Unfortunately, the short-sighted rush to profits by the publishers has resulted in a completely lost opportunity at such prosperity.
Is on-disc DLC justified? Maybe that's phrasing the question wrong. Perhaps the better question is whether on-disc DLC has benefits that significantly outweigh the detriments. Given the lost opportunity for gamer loyalty, the lost opportunity toward increased revenue, and the risk of having the on-disc DLC hacked such gamers can circumvent paying for it, on-disc DLC does not appear to make good business sense. In fact, it seems to put the developer and publisher in a position of working exponentially harder for marginal gains compared to what they could be achieving otherwise.
Just my 2-cents on the matter.
