well, its true that Microsoft did Require your game to run completely off the disk (due to some original Xbox360s being sold with no HDD) Untill a recent Dashboard Upgrade that allowed you to Install games to the HDD. it doesn't require them to stick to 1 disk. (see also FinalFantasy13)
I have a low grade xbox 360 that does not have a hardrive.
It gives for some funny things, such as buying a game of dragon age origins that has a free shale dlc code.
All you have to do is enter the code and download the dlc.
I cant lol, cause my drive space is too small to contain it.
I dont mind, I bought the thing especially for Oblivion with the understanding I had the choice of buying things to add on that would increase its capabilities.
I do not know if microsoft requires game makers to tailor games to fit to the lowest grade of their system, though I suppose it would make sense from a business perspective if all xbox games were playable on all consoles.
In any case Im against such a policy.
Now that the current generation of consoles is nearing the end of its lifetime I see no reason to not make games more tailored to the level of technology we have today.
If low grade console owners need to upgrade their hardware to be able to enjoy modern games to their fullest, so be it.
We will have to start thinking of buying an entirely new console in a few years anyway and since the last version of consoles was compatible with the current one, we can just wait with those games till we can play them on the new console, if money is a problem. (And if things are compatible again. But I see no reason for them not to be.)
I for one would be perfectly happy with Skyrim coming out on two or three disks and a hardrive installation if it meant more game.
For an elder scrolls game I would upgrade my hardware.
If Bioware went above limitations of low grade consoles Id wait till I could play them on the next gen Ill inevitably have to buy.
P.S. If anyone knows more funny Oblivion dialogue print it please, I love that kind of thing.