I don't see how on earth this is a bad thing. Its an xbox; microsoft produce this product to make money. If want an internet browser get something else.
I'm so glad that microsoft don't let people do whatever they want on their xbox. It means that when I want to play videogames, I can turn on my xbox and play them, (relatively) safe in the knowledge that they won't crash, get fucked over by viruses or malware, hacked by bitches or nagged by a million updates and pop ups and irritations that I really couldn't care less about when all I want to is shoot someone in the face.
Bottom line: I like how the xbox is contained, because it makes it efficient and reliable. It annoys me enough all the shit they keep adding the dashboard. Don't let people have complete PC functionality, because then you'll have all the shit that goes with it.