Here's my issue with the potential of an "always-on" console:

We're not ready. In the Americas, in much of Europe, and especially Australia, we are not ready for something that requires us to be online at all times. Until much of the world is wired in the same manner as South Korea, we aren't ready for this. The infrastructure simply does not exist for this sort of thing. The unfortunate alienation of a larger portion of the userbase than anticipated will be Microsoft's result if they follow through. Will this HURT them? No. Will it stop most people from buying their system? No. Will it turn 360 players away from the Xbox? Some, absolutely.

Give it one more console generation before you rely so heavily on the digital age.