Microsoft has consistently stated from the first announcement about the Xbox 360 that they want it to be more than just a gaming console, that they envisioned it as becoming a nexus of home entertainment. To be "piss[ed] off" that they have been attempting to follow through on one of their core stated goals does not make sense, as we all knew what Microsoft wanted with this console from the very beginning.
I think you are thinking of the PS3 because M$ actually slammed Sony in the beginning for those statements.
Now M$ (Sony too) just as with the Wii and Kinect is trying to play catch-up.
And they will eventually cave with the Nextbox 360 with some sort of Blu-ray player.
Pissed off might be the wrong choice in words but they need to focus more on gaming.
they took their eye off the ball to play catch-up IMO