This is unfortunate, but MS can always restrict pricing. They have final say on content released over their network. As for DLC, many companies in the last few months have begun offering free DLC to their customers. Not all companies are bad. While there is a risk they could try to raise prices more, I feel there is more than enough to keep that from happening with this system. But as you said, most of that responsibility rests with the consumer to vote with their dollar. If the games are selling for too high a price, they should simply not buy them. In which case the developers will lower the price and learn from their behavior.
Um, when has Microsoft ever restricted the cost of anything?
Microsoft is just as guilty as EA or Activision when it comes to price gouging. I mean you still have to pay for Live which I might add has adds from major players like Mc Donalds and Toyota and Sprint ect which should be more than enough to pay for Live to be free. If you buy a controller does it come with a rechargable battery or do you have to buy that extra, how about a WiFI adapter or a hard drive both are extra and they cost WAY more than the average retail price for other 3'd party products. Most of which won't work with the Xbox by design forcing you to buy there overpriced items.
Just say no to digital distribution, as a consumer your protecting yourself every time you do.