When's the last time you saw a swastika in a movie or a flier or a tattoo or a T-shirt, and it wasn't this bad boy or a reference to it?
The last time I saw a swastika, it looked something like this: http://www.religionfacts.com/buddhism/images/symbols/swastika-chinese-amulet-cc-rubicon-200.jpg
Let me try to list all the recent times I've seen swastikas:
- once, in a screenshot of 4chan trying to be funny
- three times, in a world history textbook, talking about the Third Reich
- at least fifty times, at the local Buddhist temple
- at least thirty times, in various good-luck charms sold at local flea markets
- once before every important exam I take in school, in a good-luck charm passed down to me from my mother (it looks a lot like the one I linked to)
- at least twice, in friends' houses, where they are said to bring good luck
Perhaps, wherever you live, swastikas aren't commonly used, and perhaps you have no interest in other cultures. There's nothing wrong with that. But to assume that your experience holds true for the entire world - and that the swastika universally no longer holds any meaning besides that which was ascribed to it by Nazi Germany - is laughable.
In Western Europe and North America, the swastika didn't have very much meaning before World War II, so after World War II, it became strongly associated with Nazism. But in Southeast Asia, the swastika has been a symbol of good fortune for thousands of years, and a fleeting decade-long regime in some far-off country did very little to change that.
Even in the West, such as in the United States, there are many immigrants from Asian countries. I am one of those people, and if someone showed me a swastika (and it wasn't enclosed in a white circle on a background of red), I would think "good luck" before I thought "Nazis", and I bet a significant number of other people in Western countries would, as well.
I'm not saying that banning swastikas in Xbox Live was a bad decision. It was probably the correct decision, especially if the majority of the Xbox Live users in question are American - though I agree with metrix007 that this guy could have had a better tone about it. I am, however, saying that the association between the swastika and nothing but Nazi Germany is far from universal.