Microsoft blocking unauthorized storage devices for Xbox 360

It has been reported that with the coming of next week's Xbox360 NXE update - also comes the disabling of unauthorised storage devices.
The news came directly from Xbox Live's Major Nelson:
http://majornelson.com/archive/2009/10/16/unauthorized-xbox-360-storage-devices.aspx

There is some confusion as to what this means for third party peripherals, like Datel's Max Memory (pictured) for example. And it seems for the moment that they are only going after unauthorised memory units and not harddrives.

I'm sure there are quite a few people out there who purchased units thinking that they would be 100% compatible with Microsoft's console when they bought them. Maybe Microsoft should look at re-adjusting their peripheral prices before banning non-official products.