I think M$ realized that xbox was already a poor competitor to begin with; hobbling a new product with nothing but dissatisfied customers at the outset is never a good marketing strategy. So, like the dog with its tail between its legs, it crawled back in its hole. Good boy M$, now fetch my slippers, LOL...
No, Xbox was trying tons of new stuff. Too bad "customer's always right" and they want just a rehashed Xbox 360 using new CPU/GPU. I was gonna get one anyway down the road despite all the crying about it. Full digital distribution and updates, cloud integration and family sharing were pretty awesome on paper to name a few. Too bad we didn't get to see them rolling. Fuck used games babies.