I have to throw in my two cents here. While I agree that this program is a bit too much per game and I defiantly feel cheated paying for a new version of a game I already own on the same console, I feel it becomes a bit elitist saying that the entire idea is worthless. Sure many here have an entire room of actual cabinets so this concept can seem, to us, a bit pedestrian. I acknowledge that there are free options in emulation out there, but emulation really caters to more of a niche crowd. I have seen it said that because there is a price on these it encourages piracy, but I don't see the pay content on ITunes encouraging piracy. This idea isn't necessarily something designed for the smeller fan base that collects arcade games or spends time on MAME but instead the greater masses that play Xbox.
Regardless how much the thing costs, it needs to have a price on it as there are people that are spending time producing the content and there are people publishing and providing the content; not only do the have to pay for them but they need to make a profit for this to work. While I hate the idea of paying for the games again, I have noticed that these aren't the same versions that Xbox live put out before (look at the vector games, they all have the vector glow added and many sounds have been fixed; but where it the Asteroids Back drop!?). While the idea isn't perfect I think it's been executed pretty well, much better that any one company's standalone compilation.
I think the best bottom line here is that it is very good to see this kind of support and attention for bringing these amazing classic titles, that often get overlooked next to their new high tech counterparts, to a new audience and keeping these games (and our collections) relevant.