Xbox Live as a premium service does hold much value in my eyes. When paying for Xbox Live you are committing the ultimate sin of paying for content that is already on the disk. Unfortunately it is a behemoth of the industry and won't be disappearing anytime soon. I don't understand paying for Xbox Live, then having the Xbox Dashboard full of ads and other assorted crap you don't want see, when the Playstation 3 service is free and has a very clean start up screen.
Microsoft is doing their best to dilute Xbox Live even more, adding Twitter and Facebook functionality to the Xbox. I believe that move annoys the Xbox consumer because it clutters up the already cluttered Xbox dashboard, and it annoys consumers on Facebook that could be thinking about getting an Xbox because they are updated every time you get an achievement point or play a game.