The dumbest thing about Microsoft's "no game sharing" fiasco was that they let it be PR spun into "no game sharing" and people remembering that fight that way. It was never about
no game sharing: it was about building a robust digital game sharing system (because Microsoft
knew digital game sales were already the majority).
The original Xbox One plan would have been an unprecedented amount of support for digital game sharing. They were working on something a lot like "Steam Family Sharing" but taken to an extreme: you didn't have to prelink Xbox libraries with your friends and manage a "family" of accounts, you just "email your buddy" a loan of a game you owned. You could even sell it to your buddy directly there in your game library while they were borrowing it (and Microsoft would get a small cut).
Microsoft's mistake was tying all these new digital game tools system-wide to physical purchased games too. They decided that discs would just be digital unlocks and disc loans/resales would have to go through the same digital system as every other game. (Similar to Steam making all Half-Life 2 sales just Steam unlocks; but Microsoft's mistake was making it console-wide rather than just their own games.) They thought it would be easier (for themselves, and conceptually for users) to manage one combined system of digital loans/resales than the confusion of mixed cases like someone buying a disc for the base game but then a bunch of DLC through the digital store.
When the physical stores went angry that physical copy resales would need to be tracked in Microsoft's digital systems and resold through that and that Microsoft would get some or all of their cut, they spun the whole plan as "no game sharing" and won on that PR. But that original plan would have been the largest game sharing system on any digital goods platform if it actually had been delivered as promised. It's just incredibly sad that Microsoft didn't figure out a better answer to that "hybrid" problem, didn't have a great PR fix for the spin from the pawn shops that at the time still owned too much of the game sales market, and had to kill the digital game sharing system in its infancy to "fix" the physical disc resale "problem".