I don't think this ends well for Ubisoft, but it won't end well for gamers either. There's a limit to how far you can push the consumer, and Ubisoft has crossed it.
First, there will be negative reviews in the media, which publishers take very seriously. Second, upon launch, the system is not going to work very well. Forget about activation, you can't even play without a persistent connection, so imagine the Steam launch in 2004 amped up to 11.
Consumer outrage will come through on customer service channels. Many customers will not be able to play the game they paid for whenever they want because of net congestion, server overload, port forwarding, etc. Someone will inevitably file a class action suit.
Now Ubisoft has to fend off bad press, pissed off customers, and litigious consumers simultaneously. My bet is that they scrap the system within a year. The end result? Ubisoft slips against the competition, blames the PC market, and PC games become even more of an endangered species. Thanks for fucking everything up, Monsieur Guillemot.