The thing I don't think people realize about XBox Live is that MICROSOFT AREN'T HOSTING THE SERVERS. You realize that the vast majority of games set up the player with the best connection as the host. All you are paying Microsoft for is to set up those matches. You aren't paying them to host files and demos, those are available to Silver users who pay nothing. You aren't paying them for voice chatting/messaging because those are available to Silver members who pay nothing. You aren't paying for them to host your Gamerscore because that's available to Silver members who pay nothing.
All you pay Microsoft to do is to set up multiplayer matches. Then they waste no bandwidth as they make the person with the fastest connection the host. You guys are paying for the part of XBox Live that takes up probably the least bandwidth/server use, the match-making part.
And for those games that do have dedicated servers, well Microsoft doesn't host those either. It's up to the developer/publisher to host those.
I think making people think XBox Live is worth paying $50/year for is one of the best things Microsoft has ever done for their bottom line.
