Im not one to suggest Piracy, but to eliminate speculation with fact, you can use the Xbox Live services as long as you don't play your backups that are not injected with the very advanced security sector files.
I utilise a flashed Xbox in order to preserve my, very expensive, games. Each time I buy the game, I go on the internet, find the very tiny security files, and proceed in burning the games. The reason I go through all this trouble is that my Xbox 360 destroyed a R700 game of mine a few months back, it was non-refundable, I was very disappointed with the lack of support out here in South Africa. So disappointed in point of fact that I turned to my own resourcefulness instead.
I believe the lack of Xbox Live support, and the lack on various other tiers of service, gives us a valid motive. Arguing against said fact would be a clear lack of acknowledgement of our current status-quo given the international consumer market.
I am a happy Xbox 360 gamer who uses Xbox Live as well at the moment, with a very Grey Xbox 360.