I was banned on one of my consoles. I'd modded it a year or so ago and put a WD 160GB 2.5 SATA drive in there, flashed to look like a 120GB Microsoft official drive. I found out later that I didn't need to modify the firmware on the DVDROM to do it, but I assumed I did anyway.
This particular system never booted a burned game. It ran nothing but originals. It was also banned on The End Day.
By modifying my console (ie upgrading the hard drive myself) I violated the TOS and my console was banned from Live. Fair enough, I'll take the hit.
Where *I* got pissed off was all of the saved games on the hard drive were suddenly "corrupted" - I could not copy them to memory card and move them to another console. This was an issue for about two games where I hadn't moved stuff over. (this wasn't my main console and had moved most things off it ages ago)
Mainly I was choked I lost my Viva Pinata garden
Essentially, Microsoft destroyed data on my hard drive. I think this is where the lawsuit is coming from. All of my XBLA titles that were licensed to that console were also disabled and reverted to trials. I think this is where people have a legit beef. Ban the console from your service, fine. But fuck up all of my saved games? Kill all the stuff I actually spent MONEY on because the online service they don't require to run is no longer available? The hell with you, buddy.
Don't label everyone who's "modded" their Xbox as a pirate. Because I bet there are a lot of people out there getting fucked over on this too. I probably buy more of their software than a significant amount of their customers and I refused to bend over on marked up hardware... and I took a hit for it. Such is life. I've moved on - but I will cheer for anyone willing to stand up and drag them through the mud for what they've done... but I'll do it out of spite, not morality
The banned console is now making a family who could not have afforded a 360 very happy... along with a spindle of dual layer DVD-R blanks.