How to make this succeed:
1) Eliminate the 'points' system and link transactions to real money.
We're adults. We don't like paying for things in packets of Chuck E. Cheese tokens, no matter how they brand themselves. Whatever mysterious ephemeral revenues Microsoft is currently skimming off the top by playing The Arbiter of The Monopoly Money can be recouped in an honest, transparent, and straightforward fee, visibly applied to all purchases; ie, "This item costs 10.00, with an additional $2 Xbox Service Fee". This will increase ease for the user, and attractiveness to third parties. More importantly, it's less of a 'fuck you' to your customers, in that it doesn't condescend to them.
2) Increase the ease of access for user-content-created portals
The indie games channel was a step in the right direction -- but come on. It's 2011. The absence of a Newgrounds-style game upload channel without the cumbersome approval process Live currently requires, is astounding. Do you...do you not like money?
Allow developers to set their own price. 'Free' games may be plastered with the ad of the week, while larger prices are subject to a proportionally larger 'Xbox Service Fee'. Link this to a user rating/review system which is much more visible than the one you have now, and implement tight parental control features over the whole shebang.
3)Third-party Support
Again, the avatar clothes are a step in the right direction. Get third-party publisher to develop games and services which will fit right into this 'hub' experience you're trying to present. More specifically: tailor your system to their needs, in a way which will allow them maximum creative freedom -- and therefore most attract them -- while earning you greater revenue and overall capability. It should not be impossible to create a system of 'Microsoft Development Agents', either real or online, with which studios could collaborate in realtime.
Eg,
"We're having trouble getting our game to accept Avatar/Kinect input."
"Okay, let me see your code."
There is no reason a game like Mass Effect should not be able to read the visual data from my avatar ([brown hair], [blue eyes], [large nose]) and match it to their own presets of the same, and the ability to do so would create a unique, overarching experience which would actually follow through on what the Avatars are supposed to be. As it stands now, they're little more than decoration for my Xbox menus. This is wasted potential, and wasted potential money.
Despite this knee-jerk anathema bs from the hardcore crowd, I understand what Microsoft is trying to do with the whole gaming-hub type deal: and it's commendable . . . but only if they do it right.
Don't shoehorn revenue streams in, and expect quality to fill the crevices.
Create quality, and find ways to draw revenue from it.
Edit: and the lack of an Xbox meta-game centered around gamerpoints, money spent, etc, which unlocks perks, discounts, and so forth, is simply astounding. Get some MMO consultants from Blizzard into your offices, and get cracking.