Gotta admit, MS didn't help with their bungled message and PR statement almost aimed at infuriating people. "Backyard compatible is so backward!" "We have this great product call the 360" etc, I feel personally that a lot of the stuff they're trying to impliment aren't something they came up with in the Xbox division but rather a more broad directive by MS in general. It wouldn't have taken a genius to figure out exactly how unpopular their policy could potentially become and mob justice needs no reason.
An example to look back on is the 'new coke' fiasco, that the general reception of new coke wasn't actually that bad, the problem was PR and the lack of choice. Consumer weren't mad because there was a new coke, they were mad that the choice was taken away from them to either choose new coke or classic coke, there was only new coke or nothing #dealwithit, and many poeple dealt with it by simply not buying coke altogether.
To further illustrate this point, they did a blind test during the later years between a mixed group of self professed classic coke and pepsi lovers with a couple of new coke fans... a whole lot of them did not pick the actual beverage that they claim to love (most of them picked new coke), and some became extremely angry after being confronted with the truth.
In the end its all about choice.
Totally agree with you MS was acting really snobish and wait..."Backyard compatible" when did ...sounds awesome why is that backwards damn it that Don Matrick is a prick.
Back on point,well i doubt "upper MS" didn't had anything to do with it but truth is this industry has had the same business model for far too long,any change to it in anyway is welcomed (Steam).The problem with this particular change was entirely due to a muddled PR messaging,the having choice part or the best of both worlds is certainly a better proposition,but im sure it would have raised alot of issues.
Both sides benefit the consumer, one side is pro publisher,the other is pro retailer having both would piss off both.But i think the technical hurdles would have been far worse impacting the overall OS "simplicity".