When an Xbox is banned from Xbox live for being modded but~

does it have an affect on the hard drive itself and the gamertags associated with the Xbox?
My cousins Xbox was banned for being modded, and its hard drive no longer works on any Xbox other than that unit. On any other it says the profiles are corrupt. You would assume that his Xboxlive account would have been banned along with the system but he has recovered it on another Hard drive and is still allowed to log in as a gold member. Did the corruption of his hard drive have to do with the banning, or was it completely coincidence that it happened to crap out soon after his system was banned?

coincidence

Probably a coincidence, of course, the XBOX GAMERTAGS were immune.

Xbox Company knows that those users can get back online with a new console, which in turn sold more consoles this holiday season.

Still, Piracy is horrible, I kinda wish they banned the GAMERTAGS too...but I know keeping those GT's active sold more machines this year.