I think in 2004, quite a few people were surprised about how successful the (more expensive) collectors editions were. 'Madden' was a good example of that. Most recently 'Doom 3' came out on Xbox and the premium version outsold the standard edition.
In the past, the perception that something has a premium price point has led to the demise of the platform. You can look at Sega as an example of that. You can look at 3DO as an example. Microsoft is going to be incredibly sensitive to that.