Windows Store apps are not compiled for PPC not to mention the 360 GPU which is most likely not WDDM compliant.
And....not enough ram.
No HDMI in for TV
just some reasons I can think of now.
Finally an answer with some meat
Windows store? Don't really need it, plenty of apps for the major services already on XBL. It'd be nice though for the smaller ones I guess.
Plenty of RAM. Apps on X360 are very responsive. With a stripped down OS you also free up resources,
No HDMI in, good point, but with the push towards online services, cable viewer numbers could be much smaller in a few years. Even Microsoft is pushing with original programming on Netflix.
Again, we're talking about competing with the already successful and established devices on the market. X1 provides more functionality at the expense of cost. So aren't you automatically creating a niche hole for yourself and pushing yourself out the market if you can't beat Apple and the rest?
Disclaimer: I should have probably said I don't expect them to pick 360 over X1. Just thought it was worth talking about