I agree about abuse. Half of players will show their knobs
But I wodnt agree abt traffic. Me and my son play around 50 games a day, 6 players. 300 pictures a day * 5 Kb of size * 30 days = 45Meg a month.
Which is not bad for a good broadband.
Now imagine what does that mean for Xbox Live servers. I would have wild guess that there is 300-500 thousands of live users. Let say 250 000 * 45 Mb = 11 Terabyte a month.
Which is expensive even for Microsoft. And world channels are not of rubber. They are limited.