MS stands for money.
I can understand NBC wanting to protect their product. But what was to gain from this? Look at the, dare i say thousands, of shows sold weekly on itunes.....why wouldn't they want a piece if that? I mean really, how many episodes do they think they are going to sell in the Zune store?
The fact that MS caved is simple. They want something

doesn't have...NBC. The networks are like the recording industry, they have ruled with an iron fist for so long now that having a retail outlet like iTunes dictate the trend and the pricing puts them off.
The reality is that they will come back to itunes, for the same reason they would sell to Walmart. Even though you are told what the price will be and what you will make, you will sell 30x more than any other place singularly.
They are playing hardball with itunes, like some others...and all are being sold their AGAIN. Wait for NBC's stock to keep falling, then the action happens. . . . .