I get your point. I was on my 4th XBox when I traded it in for the new Slim model. What you are forgetting, or more my point, is despite all the limitations, XBox has outsold Sony time and time again. Microsoft can do that with a system that breaks down AND charging for live service. You have to wonder why that is possible.
Personal feelings or bias aside, sales numbers don't lie.
I have by no means done extensive research on this, but according to this article the 360 has sold more, but the ps3 has sold more every year since they have both been released. The only reason it appears the Xbox has sold more is because of its early release. It doesn't look like its outselling it time and time again.
http://gamercheeese.com/2013/02/18/xbox-360-vs-ps3-the-console-wars-numbers-game/