Well, no matter the reasoning, I greatly enjoy the convenience of Live.
For example, here's me on Live waiting for friends to join and have a Horde match of Gears 2:
-...waiting
-*Press Guide button and bring up friends list.
-Invite all who are playing Gears 2.
-Friend joins.
-"Hey man, what's up?" "Not much, u", etc,etc,etc
-"Hey no one else is joining, you got anyone from your list you can invite?"
-"Lemme check... uh... yup! Invited a few guys."
-Someone else joins
-New guy: "Ah, look, this guy's playing Call of Duty--screw that, man, get over here and play Gears XD"
In under a minute, we've got a full party, we're laughing, joking around, and keep in mind that I've never met any of these people in person, and there was no matchmaking involved.
THAT is why Live is awesome.