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The term "DLC" (in regards to consoles) stands for downloadable content. This was advocated heavily by developers, who swore they would give gamers an incredible experience by utilizing it. Initially DLC was accepted as it was, but a closer look at the content would change that.
The realization comes in large part from a look at the content being offered (i.e. costumes, weapons, hidden characters) which are unlockables, that would have been in game last gen. A perfect example of this, would be Tales Of Graces F. All costumes are only attainable through download only, at $3.99 a piece. There are 19 costumes total, which comes to a total of $75.81. The price of the costumes, plus the price of the weapons and whatever other unlockables a a player buys (if buying all) is well over $100.00. (this plus the price of the game, which is $59.99)
This goes against the model of the series that was set last gen. Both Tales Of Legendia and Tales of the Abyss had all these extras as unlockables on the disc. This new model will only hurt the series. (plus gaming as a whole) The way the game is setup now (i.e. removal of content) there is no replay value. Therefore after a player completes the game once, it's on it's way to the pre-owned section of a video game store.
The truth, developers are breaking games in half and selling gamers the pieces (to fill in the blanks) as DLC. Another realization comes by way of hackers (yes, hackers) who accessed certain so called "DLC" on various games (on the disc) then revealed it to gamers. Thus the new connotation for DLC, is "disc locked content".
There has been a claim made by developers and or publishers that it's impossible to differentiate between what and what is not DLC. This couldn't be further from the truth, in essence DLC is suppose to build on the existing foundation of a game. (i.e. essentially, it's content added outside of the main game) These additions, would basically have had to been built from scratch and after development had already finished for the game. Unlockables should not be sold as DLC, if developers (big if) didn't have time to put unlockables in a game, they should allow them to be downloaded for free.
There are many who would say, well development cost are the reason (they have to make up the money it cost to develop the title), but that is not the reason why content is being cut. The games this gen are overpriced (which is another topic all together and one I will address) so developers cut content to make up for the loss of new sales, as gamers buy pre-owned copies of their game. Although, this is secondary to greed, as more and more publishers follow suit of one another, it's who can make the most money.