I can see why Microsoft thinks this would be a great idea. If I had come up with it, I would probably think it was brilliant, but I don't think it will do very well in the long run. Firstly, the pay to play system pretty much translates into paying for a demo of a 20 year old game. If you want to buy the game outright, you have already wasted 40 points on it. (Unless you could pay fifty cents to play it until that added up the price of buying the game, at which point you would automatically owne it. Are you listening Microsoft? Probably not.) My point is just that there are better (and cheaper) ways to play those games. If you look in the clearance bin of your local used games store, I'm sure you can find a dusty stack of "Classic Game Collections" for under 10 dollars because nobody bought those either.
Secondly, I get the fact that Microsoft wants to expand what you can do with your avatar, but does anyone really care? I know I don't. I feel like the Xbox 360 is really the console of the "core gamer." Most people in that demographic don't really care about playing the cutesy avatars that come along with these types of casual experiences. If that's what you are looking for... then buy a Wii.