Some thoughts-
If you think of games in a traditional brick and mortar sense then always online sucks. But if you think of games or an entire platform as a service (which inturn is a collection of smaller services) always on is the only thing that makes sense. Your cable box is always online, because that's the only way such a service would work. And so might your 720.
Truth is it's only as bad as it's implemented (could go either way here).
One things for sure, if Microsoft do go this route gamers would have to give something up (loss of ownership rights to software, mandatory service fees, and potential connection problems, etc) but also potentially gain something in return (cheap/free hardware subsidized by contracts, and a significantly more functional, robust, and content rich online infrastructure with content and features only possible with an always online system.)
As one scenario; I could see an always on x-box that's $100 with a two year monthly service plan out sell a $400 PS4. Nothing to do with the quality of the system, but just from a business perspective. And I'm totally a Sony guy.
The next gen will be won by who ever has the better business model plain and simple. It's foolish to discount Microsoft so easily, especially based on rumor...