I don't quite take Gabe at face value. There is plenty of free DLC available on live, including Valve's own L4D survival pack. I think the issue is DLC with achievements won't be free under MS policy. That's OK, strip the achievements out if free DLC matters so much, or don't charge a stupid price like 560.
I think it's more likely that Gabe would like live to operate like steam, where every time you fire up your game it downloads some stupid patch or tweak. Personally I like MS' policy, it makes sure that patches are valid and not an endless stream of rubbish.
Valve were welcome to release a map pack for TF2 without the other updates, it is Gabe and Valve which have been holding up game modes, not MS.







