The major barrier to "true" paperless as I see it, it not technology, or public feeling. In our modern, privatised railway, the biggest hurdle will be agreeing to a universal standard product. We've seen even with ITSO, there is considerable difference between products.
Perhaps ATOC could propose a "National Railcard" smartcard, perhaps with incentives for adoption, ranging from multi-use discounts (5 in 7, weekend reduction for Mon to Fri use) to promotional fixed fares and even, as with the old SWT Day's Out scheme, free entry for attractions and events.
This card could be available for a deposit from any manned station, negating the need for advance purchase and allowing ad-hoc use. NFC tech would mean contactless barriers and easier checks on trains.
Using this alongside traditional, non incentivised paper fares for a period, allowing people to get used to a universal railcard (which the current railcards could be purchased as addons to registered cards) could be done in one franchise area as a trial, with support from government (subsidy, etc.) and allow any kinks to be ironed out before a national roll out.
AFAIK most modern TVMs already have a contactless reader, and software can be added to allow cards to be read, automatically applying railcard discounts and possibly even reducing fraud on those sales.