I don't think Oyster is a good example of how smartcard ticketing could/would work in the future - but I do see how they can replace the current tickets in London particularly well - given a lot of the time people just get a Travelcard.
To be honest, once the cost of a chip is so low, you can still issue disposable smartcards that will be a lot more intelligent than the paper ticket - but still be offered like normal tickets and not require people to buy a smartcard or register etc.
Contactless credit cards could perhaps store travel information, or your mobile phone, or other devices - and you'd probably have one single account registered to multiple devices.
To be honest, given that I would not be involved in such projects, I've not put that much thought into the exact specific details - but I do know that the current magstrip tickets will have to go. I don't care too much if the replacement still acts much like the current tickets in the most simple form.
And, again, Oyster is a mess. It tries to do too much and does things badly, especially on National Rail. I'd be wanting a nationwide/EU-wide ticket system that is far more dynamic, but can still work locally just as well (which is how most people would always use them).
For higher fares, you'd probably have your smartcard and then pay separately - as against having loads of money stored on the card, then the ticket(s) are loaded. The smartcard, and your account, can then reward you for regular train travel, give discounts for certain journeys made within a certain time, be used to get certain benefits (e.g. free tea/coffee, meals) depending on the class of ticket and so on.
You could also use that ticket to record your travel, so you have proof of where you boarded - a sort of permit to travel.