Well, I think one of the main reasons why Xbox live charges is for the renivestment they put back into it. If they didn't chage for live they sure as hell wouldn't have Rare spending their time working on the fall update.
I think the best example of why they charge for live is actually the PSN. Look at how home has basically fallen apart, if Sony was charging for PSN you can bet Home would be up and running by now.
Charging for Live allows MS to pay employees to actually work on the service without it being a drag on the their bottom line.







