There's a guy who works two minimum wage jobs. He just saved up enough money to buy the new 720 because he loves Madden. It's the only game he buys every year.
The problem is that he just moved out of his mother's house, so bills are tight. He doesn't have broadband because
1) It's expensive
2) Where he lives, the internet service providers don't have plans he can afford.
You just kept him from playing video games with your always-on connection.
Another guy just started college. He loved Xbox when he was in high school, but the college doesn't allow you to hook your Xbox up to the internet.
You just kept him from playing video games with your always-on connection.
There's a child who got a new Xbox for Christmas. His parents can't be bothered to set up the console so he can get on Xbox Live.
You just kept him from playing video games with your always-on connection.
There's a place out in the country that doesn't have any means of reliable broadband access. A family has scraped together enough money to buy a new Xbox.
You just kept them from playing games with your always-on connection.
Thunderstorm? No video games.
Poor people? No video games.
Not allowed? No video games.
Not tech savvy? No video games.
I don't know if Microsoft realizes this, but their brand was built on college-age males who aren't rich.
You're punishing them.