The price of the bundle is solid. Kinect it self it priced too high. Granted you don't have to worry about buying multple controller/controller pieces like you do with move and the Wii but I consumer they are targetted probably won't realize that.
Interestingly enough the 360 S Arcade is superior to the Premium 360 once you add a 250GB HDD. Sure you lose the glossy finish but you have all the same features plus 4GB of internal memory.