"In our our continued effort to keep gameplay safe and secure for our community of more than 14 million members, Microsoft has taken action against a small percentage of Xbox 360 consoles that have been illegally modified in order to play pirated games. The health of the video game business depends on customers paying for the genuine products and services they receive, both from manufacturers and the local companies that support them."
So, there you have it. The health of the video game business depends on slapping modders and haxorz on the wrist and taking their Xbox Live privileges away. So, kids, don't do it. Don't mod. Or just don't go on Xbox Live with your mod. (End X3F public service announcement.)
[Thanks, to everyone who sent this in]