I just heard that Xbox is taking the points thing away. Now, when you want something, you will just get it in a dollar amount. I don't know if it will be better or not. People will realize how much they are spending. It's like in Vegas. You get chips to use instead of cash. People would probably spend a lot less money there if they saw cash slowly decreasing from their pocket.
I honestly hope they do away with Xbox Live Points. Just like the Vegas analogy you mentioned, Microsoft started doing it in the first place so people think they are paying less than they really are. For example 1200 automatically seems cheaper than $14.99 unless you're willing to do the math.
Not to mention with the wierd point structure you're almost always left with odd number points left over. You're basically forced to buy another 1600 point card when all you need is 100.