Providing a online service does actually involve a cost. Cable companies do not just hand out bandwidth freely. Servers do not grow on trees. Administrators do not pass through membranes from other universes. You cannot pray and receive registrations from god. Landlords totally let you stay without paying rent.
Other manufacturers provide free online play services, but that does not mean they are free to run. The manufacturer is loss leading. They are losing money, because they are actually covering the cost at the cash register. This is part of why you pay more for a PS3 or a Wii. You are being charged up front for the service whether you use it or not.
Profit making yes, but money grabbing no. Yes it probably does cost around three dollars a month for Microsoft to administrate its online service. The rest is probably profit, but a company does deserve to make a profit for its wares. That is why they make things to begin with. Investors do expect dividends this is after all not charity.
For those that asked you can find a thirteen month card for fifty dollars which is basically less then four dollars a month. Which is actually pretty thrifty compared to other online services, and is actually more reliable then developer provided support. Which is often discontinued in under a year.
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