Yeah, some of it was inevitable I think. I dont feel the competition is really on the ball enough to take (real, lasting) advantage of any MS stumbles. Sony and Nintendo are hardly Samsung and Apple.
I think 499 is the biggest problem from day 1 no matter what gets the headlines. At 399 it would be a different ballgame in pre-orders/early sales and thus perception.
The last 90 degrees and they would be back on track, it would not surprise me if they pulled that out of the hat