Smart ticketing has so many possible options, with price capping, discounts for regular travel, loyalty rewards, promotions and so on.
A smartcard could either hold a ticket paid for by other means and stored on the card, or deduct from a credit held on the card. It should be able to cope with both.
Season tickets can be loaded, or a card can automatically discount fares if you're a jobseeker, student etc. Cards could have photos on the card itself and be checked by RPIs as normal. Cards would be registered and could easily be killed if lost or stolen, or abused by users.
Ticketing would have to change radically, but don't we all want that anyway? The current setup is a total mess for all but the simplest routes where there may only be one TOC. For a lot of people, it's a nightmare.
Smartcards could also be managed by touching the card against your NFC enabled phone (or laptop/computer in the future) so you can keep check of what's on the card, instead of having to go to a TVM or ask a member of staff.
There are so many possibilities and it also makes things easy, and painless, for irregular passengers.
Sure, there will be winners and losers with any changes to ticketing - but I think that regular users can still benefit as they'll get discounts over time. A plain annual season ticket no longer suits me as most of my trips into town are now off-peak, and not every day. It means I am now paying the full price every time (well, with a slight discount using the carnet scheme, but that's a PITA!).
Edit: As for pricing set by distance, that's still possible - but with a premium levied for certain services (such as Intercity services). Trains could have readers (as well as held by staff) and penalty fares or other surcharges could exist if you boarded such a premium service. In Amsterdam, you have a premium for the faster trains and I'm sure that works with their smartcards.
To get people to voluntarily scan their card on a train to validate their ticket, for example, you might give some form of loyalty points from that operator. All of these ideas are limited only by imagination as any system could do any of that - but whether it will is another matter, but will come down to the people who decide on what to implement.