I think that's a cynical view. You can't back down at the first sign of trouble (pre E3). What they should have done at E3 was stick to their guns (which they did) and explain their system effectively (which they haven't, up to now).
They still haven't made clear what they intended to do in the first place. They wanted to consumers to listen to them, which is fair, as they are introducing something brand new. But the message was not clear. All the positives we've heard about only came to light after E3. When no one was listening, and when everybody was convinced the system is not going to get any better.
I was convinced the system was bad after E3. But when word of their sharing policies leaked out after E3, I was almost sold on the idea. I was willing to give it a chance.
Now, all they've done is make their supporters angry. Those angry people still won't be convinced.
As for the Kinect, an option to turn it off should be included. I would like it to come bundled. I want devs to think about how to use this thing properly, having been assured that everyone has one.