I borrowed a friend's xbox360 when they first came out and rented Project Gotham Racing. While playing the controller caused the console to move a bit (maybe 1/2 inch) and we heard a nasty noise and the game crashed. Upon removing the disc, we found it to be scratched beyond usefulness.
Since then I have dropped my ps2 from the case it sits in with no ill effects to the disk within. I have purchased a ps3 as well and have had no such problems with it. Needless to say, I did not purchase an xbox360 because of this, although i did have to buy the Project Gotham Game due to damage.
Combine this with the fact that EVERY one of my friends 360s die about once a year, how could MS be making money on this thing?