Do you honestly think they will? Do you think that will fly with consumers? MS could get away with it for Windows, HD-DVD, currently, cannot.
Software players will be a tiny niche market compared to standalone. When hi-def optical becomes mainstream, standalone will be far and away the predominant mechanism for watching movies as it is today with DVD. Why would they care about making life harder for software playback when it's not their market? They could have outright banned software playback and the building of PCs/notebooks with high-def optical and it would have next to zero effect on their bottom line to sell movies to endusers in the long run.
MS could get away with it for end users because MS is your only choice on the PC. If MS adds activation, you buy a PC, and boom, you have activation. Well guess what, for next-gen optical, AACS-LA is the monopoly authority here, and both disc formats, BluRay and HD-DVD delegate to them. The consumer has no where to go, and Hollywood in their wisdom, could simply refuse to deal with any publishing medium not following AACS-LA requirements.
If AACS-LA tells software vendors that they will not get DeviceKeys without adding activation, all software players will have activation, and the consumer will have no choice in the matter, other than to buy standalone players.
I mean, let's get real here. "Activation" is not so burdensome that consumers won't purchase prices with it. Cable boxes, satellite boxes, Vista, XBox Live, iTunes, and on and on, all of these devices have online activation of some sort and consumers have not run away. iTunes is the best example of widespread burdensome DRM in action, and iTunes isn't even a monopoly! It has 60% marketshare and people can get un-drmed MP3s, yet consumers still flock.
So, your "business concerns" argument lacks evidence, and counter-evidence exists.
I’m not arguing the technical merits of AACS here (nor in favor of piracy), just against your 5uninhibited faith that they’ll be able to implement all the aspects needed for it to be secure without hurting their business interests more than a bit of online copyright violation wil
AACS already added enormous delays and expense to next-gen optical. Hollywood's obsession with DRM knows no bounds, so I think you underestimate how much effort they are willing to expend on copyright violation. Traitor tracing does not endanger business interests, because for the most part, it is part of the mastering process and the consumer is unaware of it.
Online activation of software players is not very dangerous to their business interests either. AACS already has such a mechanism in its architecture to deal with Mandatory Managed Copy, so if players are built to deal with Managed Copy, they will already have client/server authentication built into them. All AACS would have to do is require software players to require MMC to be activated before playback of content, during the setup of the player.