The "must connect regularly" part is bad enough - the new XBox One consoles are also region locked. So imagine you're a gamer who serves in the military:
"There are multiple problems with Microsoft’s new strategy. You can only play an Xbox One in an approved country. Writing for the Navy Times, Jon Anderson notes: “if you’re based in Japan, Kuwait or Afghanistan, you’re out of luck.” Games are region-locked and region-activated — you can’t buy a game in the US and activate it in Japan. That means no spouses sending games as part of a care package."
The most awesome part of that - MS' response when questioned:
“Fortunately we have a product for people who aren’t able to get some form of connectivity, it’s called Xbox 360. If you have zero access to internet, that is an offline device.” He then independently raised the issue of whether or not Microsoft would support soldiers on deployment with the Xbox One — and stated that they wouldn’t.
You have to ask yourself - for this kind of PR crap storm, what win is Microsoft getting out the other end of this?