Couple of the highlights, no backward compatibility with old games, have to connected to the internet to play and a scheme to end being able to play used games. That's a big one because many sell their $60 new games and buy newer games, some just buy the old games since they are cheaper.
The game console market is huge and very fickle MS has no lock on that market. Screw them and they will simply buy different console to game on and MS will end up with warehouses filled with unsalable Xboxs. The gaming console history is filled with here today gone tomorrow stories.
Don't underestimate a Xbox next gen flop. Just saying.