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Definitely worth every penny. Also Im not sure where you get the £5 / month from

http://www.play.com/Games/Xbox360/4-/860394/Xbox-Live-12-Month-Gold-Membership-Card/Product.html

That link has 12 months subscription for £35 which is under £3 / month and I reckon that with a bit of browsing (or by finding a discount code) you could find it for less.

£5 / month implies it costs £60 a year

Just as with M$ points dont buy live or points through the 360 / MS websites. Buy them from retail / online stores and it is much cheaper.

Back to the main topic, £3 / month is frankly not a lot of money the chat, messaging and invite system on Live is so easy to use that without a shadow of a doubt it is worth it. Obviously I would not complain if it went free but do not feel that it has to. Always research purchases before you get ripped off paying to much (ie £5 / month for something you can get for £3 / month) and stop complaining about something which costs less than 2 pints every month!