They basically say we are too few to bother, i mean very few of us have all original games. i personally for one switched 100% from jacksparrow to original games once i got my 360 and it was primarily for Xbox Live feature. I have a few things I can say:
If they are going to shut down "false" accounts for downloading content, thats fine. I mean they should do this after a grace period of not logging in through Xbox.com AND the Xbox 360 console for a period of 21-30 days. And if you are away for longer periods than that you can set the console on holiday mode so that MS know you are away and don't accidently shutdown your account. I think that is a better solution than forcing people through IP addresses and forcibly shutting their accounts down. In real terms, that could be considered stealing i.e. getting paid for goods but refusing to deliver them.
Them shutting down the fake accounts is due to the deals that they made with the production studios and stuff over the rights of the digital content. Otherwise I think that these firms would not sign contracts with them because they feel that their content would be taken maliciously without the intent of paying for it. aka piracy.
As a Malaysian Xbox Live gamer, I strongly feel that even if we don't get benefits of content, such as movies, trailers, TV shows etc, that would be fine as long as we were allowed to use the Xbox Live gaming service, as in play games online and chat with friends, download game updates etc etc. I'm sure that not only myself wouldn't mind paying slightly more for xbox live so that we could have Malaysia as a locale and not have our accounts terminated. I am trying not to jump to conclusions that they are going to close accounts based on IP and mismatched addresses. This is because wouldn't that be an invasion of people's privacy by finding out IP addresses from internet ISPs?
As a solution, I think that MS should just make Malaysia a locale on Xbox Live, even if we don't have our own servers set up in the country and use those that are Singapore based, that would be fine. Even if the services such as downloading full movies and TV shows are removed, that's OK if they wish to maintain contracts overseas. However, need to attempt to make all game content available in all regions, unless for political reasons or law that this cannot be done so.
We just want our Xbox Live. We have grown accustomed to it being with us, we do not want to give it up!

Just my thoughts. and ramblings... No I do not have a blog. LOL