I do believe you have the right to tinker with something for your own personal use. However, nobody has the right to steal secrets on how something works and sell it right back only slightly modified.
If I write a software program and market it, I do not want some schmuck changing a few graphics, or hacking it slightly and selling it back, making profit off my work. He may have put some work into it, but ultimately the majority of the research and development was done by me.
Now I do think the DMCA is being done in wrong ways when it comes to say writing a program that you mentioned that helps handicapped people access a commercial program better for example. But nobody has the right to take a commercial product and sell it back with your name on it with minor changes.
And you do have the right to open up your xbox and mod it, or tinker with it, but just because it is *your* Xbox now does not mean you have the right to do illegal things with it (such as copying games) just because you are using *your* product to do it.
And I do think the notion that progress has been stalled is a little exaggerated. Open Office is a perfectly free alternative to MS Office and it can export files into any of MS's formats, yet MS is not using the DMCA to go after them. We are hardly living under a Nazi state.
If there is anything that stalls progress, it is the lack of commercial competition. Only less than a decade ago, Intel had hardly any competition and progress moved slowly. However, thanks to AMD we have gone from 400 MHZ CPU's to 3,000 MHZ now in a matter of 5-6 years. This is tremendous. And why is this progressing? Not because AMD is making chips out of the goodness of their heart, but because they are out to make money and capitalism encourages this progress.
A good example that money encourages faster progress is to look at Connectix Virtual Game Station. The emulator, other than having no 3d acceleration support, is much better than the freeware emulators that are out there. It is amazing what a programmer can do when he is actually getting paid. I know some may not believe this, but if there had never been any big software or gaming companies, I truly believe we would still be playing 16-bit games.