I'd imagine that he got some sort of punishment from Microsoft for those statements, regardless of the Nextbox's new direction, antagonising the customers is really just a dick move from any perspective. On top of that, his comments are really ignorant of possible customers situations. He seems to be making the assumption that everyone has a nice wonderful, at least 4mbps, always-on internet connection with absolutely no interference issues.
And that's a wrong assumption to make, because while yes, for the most part, the internet is accessible, it isn't 100% accessible, and some people either can't afford it or don't want it. At the minute I'm without internet until the 22nd of this month due to a cockup with BT (I'm currently using internet through my phone's 2GB/month usage). There is no way I am going to buy a console that will essentially be turned into a paperweight when my internet doesn't work, which is a regular occurrence. And there are millions more like me.
And that's why a multi-million dollar company should consider themselves to get with the times, and not allow an arrogant Creative Director bitch at his customers to get with the times.
"The customer is always right" is often an over-used, mis-used quote that people say when trying to get free stuff, and should only be used in context of supply and demand, for instance, this situation. Few people want an always-on connection requirement, so if Microsoft have any sense, they need to take always-on out of their console, or make a massive incentive to purchase it.