I thought there'd been mention of the appropriate discounted PAYG
fares being available to those with their Railcard loaded onto their
Oystercard?

I read somewhere that only certain railcards can be preloaded for
discounts - I'm pretty sure the Young Persons one was included. It
specifically excludes Network Gold Card holders which is basically
everyone with an annual Travelcard. For many journeys it will be
cheaper to get a paper ticket. How horrendous. It's enough of a pain
at the moment having to queue up for a ticket from the boundary of
Zone 2 say to your destination but now you'll need to work out whether
or not it will be financially worth your while! Surely the system
could check to see if you've got an annual Travelcard loaded on your
Oyster.