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Looks like something like this happened:

Gaming division: "If we do one more 100€ price cut, we can blaze past the 360, and compete with the Wii!"
Main Board of Big Suits: "And how much would this cost us exactly?"
GD: "Ummm... we might go profitable again in 2011."
MBoBS: "Screw market share, we gotta make some money to keep the shareholders off our backs."

Might very well be that something similar is happening with MS and the 360. They could boost the sales a lot by cutting prices, but would much rather make some money for once, ever if the PS3 is catching up, and the Wii soon reaching the stratosphere.