Saying "no you cant say that" isn't really an argument though. Most of my friends have modded PSPs but few have modded 360's. I suspect most of them don't want to risk their gamertag even though gamertag bans are rare. Hardware based modding is never as prevalent as softmods.The general public doesn't usually open up consoles in general. I agree that "pirates" will move to the console if the PC side dries up but that doesn't translate into masses of the casual crowds who comprise the majority of the industry doing it. Softmods are a different story but unfortunately they are difficult these days due to all of the protection that prevents unsigned code and the industry in general wising up about exploits that allow that.
I wish it were different, I wish people would really be well educated about this stuff because they would be more careful about what rights they give away to companies like Ubisoft. But wishing and reality are two very different things.