Microsoft isn't primarily about entertainment, so it isn't an integral part of their vision now. It's just one of their many branches of their business. That said, they do want to be a part of the entertainment industry, but they, like every company in the gaming industry, want to be more than just games. Let's face it, even Nintendo said they consider themselves an "entertainment company" that just has considerable focus and strength in games, and is now moving to expand their entertainment business into quality of life. Sony is offering other forms of entertainment now, and even focused some of their E3 presentation on it.
Microsoft went all out with it though, which didn't sit well with the Xbox fanbase. If Xbox ever ceases to be part of Microsoft's long term vision for entertainment, it will be because they come up with a new solution that appeals to a wider market. In other words, I could see Microsoft creating an all new device, similar to the XBO, that realizes their original vision for the device, but in a way that gets consumers to perceive it positively.
Picture this: Microsoft releases the Nextbox next generation, which focuses on games, but also releases a new device which they market as the "all-in-one" entertainment device that they wanted the XBO to be. Hardcore gamers get the Nextbox, while the average consumer gets the all-in-one device. The device would have streaming, Skype, internet, etc., and would probably be integrated with their tablets. There would be some games as well, both in tablet apps, maybe some PC game compatibility, and probably some games that are cross platform with the Nextbox. Microsoft gets their dream of an all-in-one entertainment device that takes over the living room, without angering gamers, at least not as much as at the beginning of this gen.
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