I don't doubt that MS is in the (legal) right here - XBL is their network, and they can do whatever the hell they want with it. Personally, my main problem is in the way that console games have become more like PC games in the way that they are commonly shipped full of bugs, which are lately 'fixed' via patches.

My 360 was banned from XBL for having modded firmware. Even though I don't doubt that the majority of modded consoles were modded to play pirate games, mine wasn't, and I'm sure that anyone who has ever had a kid destroy a NZ$100 disc will agree that backing up legitimately-purchased games will agree is fair.

Now I'm stuck with a bunch of purchased retail games shipped with game-breaking bugs, which will -never- be fixed. In FIFA 10, a massive bug (among hundreds of others) causes a manager mode save to be stuck with a club having negative $2.4 billion, ruining the game completely. This will never be fixed for me, and presumably thousands of others. Similar game-breaking bugs in other games, such as Lips (permanently stuck on 'incredibly easy' mode) pre-patch will never be solved for people like me with modded firmware and legitimate retail games.

Or... 400 million $1 hooker-bots.

Try Super Awesome Broadband - no Phorm, no shaping, no ports blocked. I've heard nothing but good things about them.