1 - If you pay $50 for Live, you should shop around more. I've never spent more than $35. But also to play "Devil's Advocate" here, some people don't need or desire to pay $50/year just to rent access to some games.Thats fine, but some people dont need or desire to pay $50/yr just to talk to people in other games.
2 - You're right. Not all people need that. I'm not speaking for everyone. And again, I would love it if it were free. But it isn't. Until it becomes free, I'll gladly spend that crucial $3 a month for the simplicity. The way you can find, talk to, and join up in-game with friends on XBL is excellent, in my opinion.