If the product is not as advertised, the consumer deserves his money back.
Consumers have a lot of power - as the ultimate boss of the market - and have legal protections to boot.

IMHO Microsoft is just going to stupidly hurt itself again with its threatening stance toward the consumer.

Has there ever been a case where people have argued and won refunds on the basis a game is bad or not what they expected?

Steam does something similar it's in the ToS. You don't own the game, more like a you own a license that last as long steams wants to (something like that, but with other fancier words)

I guess the same case applies for Xbox market :/

This is now standard for both MS and Sony.  Each one, especially when you buy digitally, mentions you are buying a license for the game.

The product not being as advertised is Bungie's issue. MS and Sony shouldn't take the hit for Bungie misleading people.

Getting a refund because you aren't getting access to exclusive DLC is not a good excuse for a refund. That was known well before launch.

What next? Playstation owners want refund for getting CoD DLC late?

This is a really strange thread. I don't understand some of the arguments about why Microsoft shouldn't ban people who commit fraud.

Contact customer service asking for a refund. Lie about the reason. Admit that you lied, in writing, with your Xbox credentials visible. Get banned.

Am I missing something? Seems pretty reasonable.

it wasn't just digital games. If you call customer support you can get full refunds on physical copies as well so long as you ship them back.

There is a reason for the license.
Allot of assets in a video game, the publisher/developer don't actually own, lets use Music as an example, media companies will lease the music for a certain time to the developer/publisher for inclusion within their game, when that expires the publisher/developer pays more or they cease selling the game.
Converesly, many franchised (Like Naruto) games have had their DLC pulled off Xbox Live for the same reasons.

As for the consumer side of things... When you go into Steam and you go to purchase a game, what do you see? Do you see "License Game?" or "Rent Game?" nay, you see "Buy Game". - On that basis alone, you are buying and thus owning the entirety of the game and not just a mere license, that is the assumption that every consumer is given.
Remember ToS and Eula's cannot override your consumer rights.

Hence, if you live in a country that protects your consumer rights (The USA seems lazy on this front, it's more buyer beware apparantly.) then you probably do indeed own the actuall game, though it still needs to be tested within a court system, which will probably never happen unless it's a class action and something goes horribly wrong for allot of people.