I think they could have done whole case replacements easy enough, the console is mostly encapsulated in a metal cage, if you make the plastic shell snap around the metal cage not only could you change out the whole color of the case but you could also change the whole shape of it as well.
The idea definitely came from cell phones, I think lots of ideas for the 360 came from the scene but lots of others, like faceplates came from cell phones.
In any case I wouldn't mind having a faceplate if they actually made a nice looking one that was easy to acquire, the E305 and PGR3 ones I would consider buying for the $20 price tag they're charging. But unfortunately they're some of the hardest ones to get. I don't understand why you'd take a flagship game like PGR3 and make marketing paraphernalia for that game hard to get.
I also don't understand why it's only been 3rd parties so far that have released game related faceplates. From a marketing standpoint it would make more sense to sell game related faceplates, people LOVE their games way more then some random design, and when they're done with a game and ready to move on to something new they'll be more likely to buy a new game faceplate as well. You wouldn't want to still be showing off a PGR3 faceplate when PGR4 or Forza 2 rolls around with their faceplates. But with some random design you'd be more likely to just leave it on for the life of the console.