Why would you go from 120gb to 20gb?
Anyway, I agree with you on this. The whole reason I upgraded my hard drive was so that I had more space for DLC. Now that I'm not limited by the 20gb of space I plan on buying more TV episodes, XBLA games, XBox originals, etc... in other words MS is actually going to make more money off of me that if I stuck with the 20gb (there's no way I'd spend $200+ after tax for a 120gb hard drive.) Currently I have no intention or desire to modify my console further, but if MS bans me I'll have every reason to do so.