I think it's pretty naive to think that MS wasn't going to find (or hasn't already found) this security hole -- you think they were sitting back in their chairs lazily twiddling their thumbs after the 1.1 system was cracked just days after it was released? They knew they fucked up and probably have already spent a whole heck of a lot of time, money and energy to figure just how that happened (recall they were looking to hire a modchip expert some time back).
So I think this is a pretty flimsy high horse for the x-ecutor people to be getting all up on - but beyond that, I think one reason some of us react negatively to such statements is that it fits a pattern for these folks of bashing others on the scene. Although both evox and x-ecutor has added much to the scene, I have a heck of a lot more respect for evox than x-ecutor, not because they have necessarily released "more" or "better" stuff, but because their attitude isn't this childish, arrogant, self-aggrandizing, self-promoting bastardliness that comes from team x-ecutor. (Anyone else find it wildly ironic that x-ecutor is now at the forefront of adding bios features (and is selling a flashable chip) when, less than a few months ago, they were claiming that the unflashable, non-upgradable x-ecutor 1 chip was "the last mod chip you'll ever need!!!" - and flashability wasn't a needed feature because the x-ecutor 1 "has all the bios features that can be added! everything else will be done through software, so don't worry and buy now!")