to be fair a lot of the time someone lent games to someone at school/uni the person they would lend it to would in turn lend it to someone else and you would get the disc back afterwards. The 10 people thing could get used up incredibly quickly, not to mention that a fair few people do tend to buy pre-owned games and via the previous system the Xbox One had, you pretty much had to sell the game back and its sold as a brand new game to the next person, essentially meaning you are paying full price for what was ultimately a pre-owned game.
I'm not saying cloud gaming is a bad idea at all, for example i think it would be awesome to go overseas and be able to log into your account and play your games from back home. Then again, if this was really a massive concern its not that hard to save your game data onto an SD card or USB and take that and the disc with you overseas.
It's just that for some situations the current system of simply lending your mate a disk is just as convenient and the fact that you aren't restricted to just a pool of 10 people with whom you can share this game and the fact that if you want a game you have the option of getting a pre-owned copy at less cost means quite a few gamers prefer this system.