Microsoft does have the right, but I suspect most of the customers don't know about it, yet I can imagine why this would piss off not only Nintendo owners, but PS3 owners as well. Is this what the Xbox 360 owners want? I don't know. I don't think they would care about it much, but even they have to consider that this is not an ethical practice.
Either that or Ubisoft can tell Microsoft to F-off. That would be the braver approach.

Either you miss out on millions of potential customers, or you play by their rules. It's really that simple.