Now that I think about it more, I think it's more an issue with the dilution of the Live brand. Microsoft has a history of doing this kind of stuff.
You remember when .NET was used EVERYWHERE? After all, Windows Server 2003 was originally called Windows .Net Server. We are dealing with the same thing with Live. What exactly does Live mean?!? There are so many different things that it doesn't exactly help distill what our internet strategy is.
And now we are starting to see the same branding problem with XNA. Everything game-development internally at Microsoft is getting re-branded to XNA. Yikes!
Dare O. has been saying the same kind of thing on his blog for a while now. Maybe you can all gather round lake Bill and chant "Hey hey, ho ho, that damn Live brand has got to go!"