Well, we all know this guy at Microsoft opened his mouth and barfed a big pile of balogna all over the table. He's just doing his job but he's obviously totally wrong. There are a couple of other interesting topics, here, though:
Opening game development up: I personally like this idea although I'd want to see quality control done somehow. Someone was discussing not trusting Nintendo's approval system due to Superman 64...there's always some crud slipping through the cracks. The NES had games that were easily as bad as Superman 64, and I bet the Super NES did too. Superman 64 just somehow became an icon for bad games everywhere, maybe because the N64 didn't have a lot of games and Superman is such a popular figure, it was easy for his misadventure to earn a lot of publicity compared to, say, Tag Team Wrestling or Amagon, my two most-hated NES games.
Developing for less-popular systems: Yeah, I agree that this can be a good strategy for a lot of companies. However, I think your product needs to stand out for the strategy to really work - for example GameCube owners will be all over an exclusive that is of good quality (Viewtiful Joe, Tales of Symphonia) but lower-quality games don't do as well (Geist and Batallion Wars). If you're going to release junk, PS2 is still a great place to do it.