It's a step in the right direction for the digital-only future if you ask me. The downside may be that the prices of games on their store will rise to fund the refund rate.
This is what happens sometimes - the consoles that need the software the most don't wind up getting because the user-base is too small. They need the game to attract players, but the publisher doesn't want to take the financial risk on a small user-base.
This says to me that you shouldn't launch your unit without CONSISTENT levels of software being released - it's not all about the frickin' launch.
so_hai's comments