I wouldn't call this "insane," just supremely misinformed. It's easy to see why this might come up:
Exec: "PC Sales stink! And piracy is up! We must do something, or shareholders will be angry."
Peon: "Well, we already invested in DRM to no effect... There is not much more that we can do, and what we are doing seems to have no effect except angering some of our customers on forums."
Exec: "I was talking to my friends over at Blizzard a while back, and they don't have much of a piracy problem with World of Warcraft. If they managed it, so should we -- do what they do."
Peon: "But... that's an MMO. That only works for WoW because all of the players have to be connected to their game servers all the time, and all of the persisted game data is on their servers. If this stuff is on player computers, people will just find ways to hack it out. It's the community online that creates the anti-piracy measures for WoW."
Exec: "Brilliant! We'll take that to the next level and do it for single-player games, too. The board is going to love me."
Peon: "Um... We'll get on it."
This is one of those things that everyone should have seen coming. I mean, half of the suggestions to me when I complain about piracy are "Make it more MMO-like, that's the only way to thwart pirates." The fact that Ubisoft is now trying that very tack is likely pissing off the very same people who suggested it to me. It's the sort of thing that, when viewed in a certain light, sounds good on paper. But when it really comes down to it, it's full, full, of problems. WoW works because there is no game without the online community aspects of it. So the "DRM" in that case is also the primary feature of the game, and thus isn't exactly onerous (not that I play WoW or any MMOs, because I find the subscriptions to be onerous). With single-player games, it's really easy to see this for what it is: DRM without much of a value-add (the only slight value being in terms of online saves, which is better implemented with something like Steam Cloud, as an optional value add). My thoughts, anyway.