It's funny that Microsoft feels XBox Live Indie Games was such a mistake and seems to think that indies did so much harm to them, given that indies generally feel like Microsoft has been intentionally harming them from the start.
They basically left that system to rot without supervision, and then it did. Where's the surprise in that? It's like they decided to greenlight it only so they could sabotage it and use it as proof that they don't have any reason to work with indies. It's incredibly stupid given that some of the best indie XBox Live Arcade exclusives (or former exclusives) were all built using XNA - Bastion, Fez, Dust - but they screwed those devs as hard as they could too, despite the fact that those games were partially funded by deals with Microsoft!
They basically left that system to rot without supervision, and then it did. Where's the surprise in that? It's like they decided to greenlight it only so they could sabotage it and use it as proof that they don't have any reason to work with indies. It's incredibly stupid given that some of the best indie XBox Live Arcade exclusives (or former exclusives) were all built using XNA - Bastion, Fez, Dust - but they screwed those devs as hard as they could too, despite the fact that those games were partially funded by deals with Microsoft!