Yeah, voice, gesture and face recognition isn't a pipedream of interface control. It is literally the future of computing. There is nothing that can be more accurate than a machine that can figure out what you are looking at, or simply follow the instructions you say. That is why they are developing the Kinect - because they realize that is where things are going, as should be obvious from the popularity of these things in literally every technological field out there. If they continue to make investments like this, they'll see much greater success in the future... And they don't really care that a thirty year old PC gamer thinks its dumb. Siri. Google Glass. Oculus. That fancy thing that CNN uses. This is the future and Microsoft is financing it by selling shitty games.
Convergence is already happening. The future is one machine that does everything, not a bunch of specialized devices that handle one thing. Game consoles are evolving for that reason, and today's daring failures are providing the groundwork for tomorrows future successes. You are literally the modern day equivalent of the guy who goes "Why would I want to browse the internet on my phone? That's dumb and people don't want it."
That's what you have to realize: this isn't about gaming, it is about positioning the company to transition to the new technological reality, which is total integration of all online and computing practices, via gesture, voice and facial recognition, augmented reality, the wearability of devices, etc.
Gamers don't want it and that's fine. But if you think tech companies are going to stay specialized by market niche, you're crazy. That is not going to be the economic model of the future, and recognizing that is why companies like Google and Microsoft are taking these risks and innovating.