I guess this is a problem Microsoft ignored with the original X-Box, i.e. the lack of upgrade options for a preset console (since the GameCube, PS2, and X-Box were all pretty limited overall). There is one XBox 360 console. Yeah, you can get different colors, bigger harddrives, etc..., but for the experience to be the same across all users, the console itself must be the same (CPU, GPU, audio, etc...). You can add all the peripherals you want, but they can't change the underlying console. Face it, Microsoft probably thought about Natal before releasing the 360, but didn't anticipate someone might want more than the traditional joy-pad-driven game console and didn't bother developing it. Then the cheaper Nintendo Wii outsold them 2-1 and they realized they were behind the ball again. Apparently overpriced graphics and storage do not a fun experience make for all gamers.
Anyone remember that stupid memory-upgrade for the Nintendo 64? Remember how some games were rather limited if your console didn't have said upgrade? Nintendo tried to extend the life of their console, but in the end just ended up damaging reputation. What do you mean I can't play 4-player Gauntlet Legends without the memory upgrade?!?!?