Definitly, a great idea, but the fact of the matter is, system link is already done, kai and xbconnect are great for www link or even internal links.
LIVE is just a tad bit harder, as the packets are encypted, once passed the auth server, your "fake" dashupdate.xbe would need to definitly be signed, as the xbox kernal has yet to be patched. (thats 2 protections broke)
Defintly the dashupdate, could easily extract a nDure install as the dashupdate.xbe contains a new dash anyways, just alter the setup a little, upon reboot the system is modified. All thru a LIVE dash update.
This would be great, and if the time ever come when this becomes a reality, is after you alter the dns lookup name that the LIVE routines call to for auth, and point them to a LIVE emu that "looks" authentic because the game's CRC checks would still be in place.
Thats when it gets touch, emulating a "authentic" looking LIVE server. They say its been done, but I havent seen it realisticly.