This is no different than Nintendo and Sony anti-piracy protections, if you run the wrong PS3 dash you can't connect to PS Online either.
Its not the end of the world, just have to wait a few days to re-connect to live. You can still use the 360 offline. The games weren't intended to be sold until November 4th so you really can't bame MS for people obtaining (and installing the update) earlier than the launch date.