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Very True OP I enjoyed the 360 a whole lot at the beginning of the last generation and it was the first Console i got for that Gen, thoug after gears 2 came out my 360 broke and I had a lot of trouble getting it fixed and replaced and by that time i had moved on with an upgraded PC and a PS3 so I was all set. So now that I have a Great PC that runs better then the current Gen consoles I really don't see a point in getting the new Xbox because most of their (exclusive) games will be on PC i.e. Project Spark, TitanFall, & Plants vs. Zombies: GW, which I will be able to run much better then what the xbox could offer and with the added perk of having MOD's and not having to pay for multiplayer.
So in short MS kinda cannibalized itself with having Xbox exclusives on PC (which isn't a true exclusive).
I really don't know if MS really should have ever made the xbox and entered the console market as they were a software company to begin with and that fact showed with the failure rates of the 360 (though they have gotten much better), not my place to judge but I think they should have just stuck to software as the xbox is kinda the only piece of hardware MS has had any real success with, they make great software though XD.