MS naturally has less first parties, and ships less games in a calendar year than Sony. So an exclusive 2nd party dev deal with MS makes sense for Insomniac, who were looking to gain more exposure for their studio as well as to launch their own fully owned IP.
This is all true, but if it makes sense or not, will largely depend on if they will get the attention and establish themselves with their game, on the new platform among the new userbase. I also wonder if the Xbox userbase is the right one; To me, I've always thought of the Xbox userbase to be a majority of hardcore gamers more into shooters, where as the PlayStation userbase has been historically very diverse and family friendly. This may have been less of a factor last generation in NA with the X360 being the top-selling console and capturing many of the more mainstream gamers outthere, but this generation, things are looking to be reversed again.
What if SO sells well under expectations? It may have not been a huge hit on the PlayStation, but I'm quite confident a typical high quality game from Insomniac usually would be easily a guaranteed "success" - success being perhaps close to a million sales if not over, even for a rather niche game. They might get more attention on the Xbox platform, I agree, but attention alone won't guarantee sales if the average consumer isn't interested in the game/genre enough.
I guess we'll see.... when is it coming out?