That money goes to the phenomenal uptime and security that the XBL service has. Granted there has been extended outages, the longest lasting for a paltry 13 days (nothing compared to the outage that shut down all of Sony's online services), but still, you get what you pay for in my opinion. XBL is more polished than the free PS3 service. When the 360s were red ringing, they offered a 100% replacement. The Yellow light on the other hand was not offered and instead loyal Sony customers were forced to have a 200 refurb, for the exact same thing that 360 owners had.
But this has nothing to do with the forthcoming failure of the Ouya, which will be muscled and bullied out of the console race by the bigger kids on the block.
Also, just buy a goddamn computer and install Steam.