And this can't be called good business because...?
...because it's not sustainable. Look at how Nintendo's market share lowered from NES to Game Cube. Look at how it lowered from the Wii's shiny beginning to nowaday's Wii U. Nintendo is able to somehow revolutionize the market from time to time but its bad attitude undermines the long-term results.
How is 299$ bad compared to what Microsoft or Sony are charging?
Easy: 300€ for a 7th gen console is more expensive than 400€/500€ for a 8th gen console. And AAA game titles will end up being more appealing to ever more demanding consumers than low-budget "remakes" mainly focused on the kindergarten niche. Nintendo may have fooled gaming newcomers with the Wii but "to blunder twice is not allowed in war".
Last time I checked, all businesses strive to make a profit. In anyway they can.
You check it wrong then. Different companies have different attitude, despite they all attempt to maximize profits. Therefore, they don't do it in every way they can. They have ethics, principles, rules. For example, Valve's principles would never allow the company to make such shameful decisions as Nintendo did with many of their consoles. They respect the gamer's money in ways Nintendo could never dream on. And the results of such different attitudes can be clearly seen in both companies' actions.
I would also like to point out that it wasn't just Microsoft fans who were against MS' practices prior to the XBO's release. The larger voice game from Sony fans and Nintendo fans.
PS3 owners may very well buy an Xbox One, so their reaction is understandable. Gamers that only buy PlayStation consoles have nothing to win from it, so I don't think that makes sense in this case. Regarding Nintendo fans, if they really did so, then they use double standard once they are much more squeezed on Wii or Wii U than they would ever be on a XOne with DRM.
I reaffirm my statement: Xbox would be a disgusting choice if its clients were like Nintendo fans.
Prediction made in 14/01/2014 for 31/12/2020: PS4: 100M XOne: 70M WiiU: 25M
Prediction made in 01/04/2016 for 31/12/2020: PS4: 100M XOne: 50M WiiU: 18M
Prediction made in 15/04/2017 for 31/12/2020: PS4: 90M XOne: 40M WiiU: 15M Switch: 20M
Prediction made in 24/03/2018 for 31/12/2020: PS4: 110M XOne: 50M WiiU: 14M Switch: 65M