COUNTER ARGUMENT:
First of all, I can appreciate where you're coming from on the 360. I have one, and while mine has had it's share of hiccups, it's been an enjoyable console for about a year and a half now (never had to send it in). But I'll concede that there is a problem with the machine and that many people have had serious problems. From that, I can see building a case against the 360 as the worst console of all time. There is foundation in that argument.
You make some valid points but over all, I don't see much substance in what you're saying.
Let me start with what you got right. Your stance on the Core (and lack of HDD) is spot on. This was a cost that very much outweighed the benefit. Sure, the Core probably reached a market that the Premium and Elite was unable to, thus expanding market share, but at the cost of tieing the hands of developers. This hurts the quality of games, no doubt.
The Elite argument and how this "hurts" early adopters seems unfounded. The main tech inclusion, as you pointed out, was HDMI. HDMI provides 1080p that improves the visual quality of the image on the screen for those HDTVs that are over 40inches. The reality is for all screens under 40 inches, the human eye is incapable of distinguishing between 720p and 1080p. But perhaps for the minute population that finds playing in 720 to be such a horrible experience, not having an Elite might be excruciating. For the rest of us, it's a moot point.
As far as the controller goes, this is really a personal preference thing. My preference is, that it is one of the better controllers I've ever played. Sure the D-pad isn't the greatest, but there are worse.
Micro-transactions. Something that, in a different context, has been around for a very long time. Today they are the evolution of what mission disks (@ $30) were for PC games. Get used to it. And it isn't just MS. It is everybody. Also, I'm sorry, but I don't feel I'm fueling MS's greed when I buy an arcade game or an add on to Rainbow Six Vegas. I feel I'm getting value for my 10 bucks. It is smart business and will probably evolve into macro transactions as HDDs get bigger and connections get faster.
Speaking of connections - LIVE. I use the wireless adapter on standard DSL. Hardly ever lags. When it does, it is usually because I'm playing somebody 2 thousand miles away. Serioulsy. Britain originated games are usually the only place I get lag. But LIVE isn't perfect. Good, but not flawless. While I don't mind the 49.99 for 13 months, eventually to be competitive, MS will either have to drop the fee or reduce it to next to nothing if the other two consoles offer free service. I would expect, with the revenue MS gets from LIVE that Sony and Nintendo begin charging a premium very soon.
Innovation. You need a technological background to understand how 360 and PS3 are innovative over their predecessors. And I'm talking about computing hardware. Not the inclusion of Blu-Ray or HD-DVD over DVD. While DVD is limiting, it isn't so to a degree that hurts creativity. Believe it or not it is possible to be creative with content and disk space where needed.
In the end, 360 has problems. No denying it. But worst ever? Not for the reasons you cited. If you want to talk worst let's talk Jaguar or 3DO. Atari 5600, maybe.
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