What makes you think this case is any different? Microsoft can't keep Office or Windows under wraps, nor the XBOX, nor anything else.
The hackers will win, as always.
You're falling into a narrative trap. It's not actually "hackers vs. Microsoft". Microsoft pays some of the best in the world. Most examples of hackers beating companies involve companies that did not invest seriously in countermeasures. That's not a problem Microsoft has.
What does it cost now?
(b) Limor isn't putting a bounty on pirating a game. She's putting a bounty on forced interoperability with a hostile proprietary peripheral. The bounty is great (even though I think "her team" will lose). I think it's kind of insulting to compare it to pirating games, which is indefensible.
They did something with consumer hardware that made tampering with it economically infeasible.
The exact same technique they use is available to Microsoft, should they be willing to pay to integrate and (more painfully) license it.
What Pay TV providers did to stop Pay TV hackers is an open secret, but I don't work in Pay TV and don't know exactly how "open" the secret is, which is why I'm dancing around this argument rather than just killing it with facts.
The utility of Kinect is a physical piece of equipment. There's no service (although it may be used with a service), therefore there's no requirement to receive updates once hacked. Microsoft only gets one chance to deploy their defences: when the Kinect is in the factory.
(Microsoft could use the exact same scheme by bricking their devices with fuses when they fail some routine checkup; they could also brick every device and then issue a recall/reissue. They have better options than that, though).
Once the Kinect is in my house, who cares what I do with it? I can smash it with a hammer, I can send it USB commands. My Kinect, my house, my rules.
DirectTV is the same. Once the radio waves are in my house, why can't I decrypt them to watch TV for free? If DirectTV wants me to pay for TV, why are they sending the signal into my house!?
Otherwise, this argument is a bit more nuanced than either of you are acknowledging.
The difference between cell phones and DirectTV is that you have session keys for your phone calls, but there is one global key for every user in the country for DirectTV. Such is the nature of broadcasting.
They chose a "cheap" method to distribute TV to users, but it's also very "insecure". The cell-phone companies, on the other hand, developed a very expensive infrastructure, and it's more secure as a result.
What just about all consumer electronics companies have failed to do is lock down their hardware from being hacked in the first place - after all, Sony and Apple also pay some of the best in the world, and the PS3 and iPhone have been cracked wide open with software.
Microsoft is certainly better than most (the 360 doesn't yet have a software patch - there are hardware solutions - that can be used for piracy), but they are by no means immune to hackers.
Some of the best. And most of the best are "out there" and not on their payroll. Plus it's not impossible that some of these supposed best on their payroll may also contribute, on the side, to helping hack/crack their products, anonymously. Regardless though, I bet for every 1 world-class hacker inside Microsoft there are 100+ outside of it, and some of the latter will have the interest and time and skills to hack it.