This will not stop any pirate, just keep them offline for a while until they obtain a replacement box. The cost of replacing a banned box isn't what people here seem to think, check ebay prices for faulty consoles with no accessories. $30 and a week or two later they'll be back up and running and the fact that they didn't cost a fortune for the new one means they will not care if the box is banned after a few months, they'll get their money's worth in the games they will steal.
The fact that you cannot take your HDD from a banned console to legit is great though and will stop people from benefitting with achievements and gamerscore on their Live accounts.
For the record I have seen zero evidence of any modified HDD user being banned yet so unless you guys have proof you're just trolling imo.
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