I think a point might be being missed here.
I, for one, NEVER WANT MODS TO BE USED WITH XBOX LIVE!
My goal, and the goal of the writer of the tutorial was to get xbox's that were banned, back on Live. Mod or no mod.
I think it's friggen great personally that MS is blocking mods from online use. More power to 'em, keep up the good work MS!
But banning people that used mods only for homebrew (like me) kinda sucks. Yes, it's their network and they can do what they want. If I was told that banning would be occuring, I would have never bought a mod, and just stuck with Live. So the eeprom swap solution is just to get people back on Live that were banned. The eeprom swap solution has nothing to do with using mods on live, I recommend the complete removal of a mod after the eeprom swap.
As for people "taking serials and shit". If you read the tutorial, or the topics about the process, you would know that is NOT what is being done. You cannot take someone's serial. You can only do this switch with a COMPLETE binary image of the person's eeprom. To get this by nefarious means while possible, is improbable. I have only done this method with a consenting user that user their xbox for Linux and has 0 intention of ever using or even buying Xbox Live.
What I intend to do is buy another xbox, then after the purchase restoring my original xbox's eeprom back to it natural state and just using the xbox for XBL.
This is just a work-around, not a fix all. Nor is it quite as negative as you perceive IMO. This is no worse than developing a mod that will obviously be used by some people for piracy, which I despise.
Z