The thing about Media Center is that it lead the way in many ways for the Xbox as an allround entertainment device instead of just a games console. Even just the interface lays at the base of many product products out there nowadays. Sure, it would've been cool if it had been the standard on set top boxes or smart tv's, but markets change. You can either doggedly hold on to your vision for the product, or adapt. Instead of selling software for set top boxes, they decided to sell their software, the set top box and the services themselves. Judging from the success of the 360, that sounds like a good move.