And they will both continue to exist for quite sometime. Like others have already said not everyone has an internet connection, let alone a high-speed one. So unless publishers want to pass on free money they will continue to have some sort of disc option.
Kupo already touched on one of the potential uses for this patent but theres also the option to do what they already did during this gen with DC Universe Online. Once that game disc connects to it's first console it becomes completely worthless, although I think thats probably par for the course with console MMORPG's. So I don't think that Sony is particularly going to use this patent for something as sinister as many are anticipating.
Having said that, if they did go and use this to ban the playing of all used games I don't see how anyone could defend that move. It would not only cut off a huge part of the market but they would be willingly giving up their own console market share to their competitors that still allowed used games on their systems. Sony has made a bunch of blunders this gen but making this kind of move would be beyond stupid and I really don't think they would be that cocky....unless they were still the current market leader. Had Sony continued with the PS3 right where they left off with the dominace of the PS1 and PS2 we wouldn't even be having this discussion. They would absolutely use this to kill off used game sales and not give it a second thought. But they were humbled this gen and have learned alot of lessons. And for that reason alone I really don't see them implementing this other than for some sort of pratical applications. The Sony of today is not the same as the Sony of 2006.