Those refurb 20GB drives will fail at a colossal rate.
MS is genious. They are basically dumping a bunch of crappy refurb drives on Arcade owners for $20 each (a profit in and of itself), and then those same people will likely get themselves a 60 or 120GB drive at full price after the refurb 20GB fails once or more times -- which of course makes their 360 unusable until they get a new drive.
Pure greedy genious. X360 users hosed again. I applaud them for their voracious appetite for money and ability to soak money from their userbase. That takes some greedy skill.