Arguing whether Xbox live is worth the cost will not accomplish much because there are many reasons why some choose to pay or don't. For some, Gears of War and/or Halo justify the cost of Xbox Live. For others, cross game chat and a smooth interface justify the cost and for others the bells and whistles justify the cost. But if somebody doesn't play online then the cost will never be worth it to them, no matter how many features it has so they will argue that it isn't worth it even though they would never use it if it was free. Then there are people that, to them, $60 is nothing and even if they rarely use Xbox Live, they will buy it anyway.
The bottom line is that some people think Live is worth the cost for varying reasons and you'll never change their minds and vice versa. The worth of Xbox Live is relative to an individual.
P.S. One advantage of the pay system is that MS has the incentive and resources to keep making Live better without fear of losing money on implementing a new feature. Whether that makes it worth it to you is is relative to you.
