Do people say I'm not using my iPhone and pay $100 a month for service anymore because it drops calls so frequently? I'm going to go back to using pay phones because it's more reliable and cheaper. No at worst they switch to Verizon or AT&T.
To be clear, I understand where your reasoning is coming from and why you feel that way. But Once again, cell phone service is a horrible basis for comparison. If you're switching from GSM to CDMA bands, you're not using the same device again. You're buying a different iPhone or Samsung Galaxy, even it looks exactly the same to you. There isn't some second version of Xbox that Microsoft is going to be selling to people who get pissed off at being locked out of games.
Also the idea of accepting the notion of being without entertainment because your internet connection is down is whacky. Locally stored content prevents that being a problem. All of the books on my Kindle can still be read when my ISP craps out. All of the .mp4 files on my PC or Nexus 7 can still be watched.
I don't see why people would accept that kind of headache from any of the companies currently involved in the console business. Why buy 25 GB+ of content on a disc just to have to rely on so many potential points of failure to be able to use it?