No. Only newer releases are affected. The discs, themselves, don't change the player - future discs are encoded with a code that older players can't play.
As I said, the player isn't completely disabled, it's simply not allowed to play newer releases.
"What possible reason would someone have for hooking up their player to an internet connection?"
It could be a phone connection, like Satellite TV and DIVX. I've not heard the specifics on this part yet.
"Even if it's updated (which we have to pay for), the hacker will still just find a way to compromise those keys. It's a never ending cycle. "
I agree. I never said it was a good system....I'm merely explaining the system as is.