I got banned, but I don't really care all that much.
First of all, I knew even before I hacked the console that it was a possible. If I was really that worried about it I wouldn't have even bought the 360, let alone mod it.
Second, I paid about $150 about a year and a half ago for the used 360 at gamestop. As soon as I got it home and made sure it worked, I opened it up and modded that sucker. Between then, and when I got banned last week, I've played/finished with about 7-8 games, all were going for $60 a pop when I acquired them. Thats around $300 in savings. That's why people hack their xbox even knowing they will be banned sooner or later.
Now that I'm banned, the only thing I really miss is the ability to install games to the HDD (a modded 120 GB drive I made myself), and to a lesser extent some of the XBLA content. I couldn't care less about playing multilayer games.
If I do decide to go out and spend $200 on a brand new 360 arcade (with an HDMI port) I'd hack that one too, as soon as the new firmware is released.
One of the reasons that banning only once per year is not that effective. People justify the savings over the entire year and just buy another one. If they really wanted to curb it they should disable the xbox completely and do bans more frequently.