Ah, MS, you and your boneheaded one step forward, two steps back routine. Removing choices is always worse, what's so wrong with giving users options like System Language, Game Language, Subtitle Language, Marketplace Locale? and then tie up your payment method only to the marketplace locale?
Why tie everything up in an all-or-nothing fashion? At this rate I wouldn't be surprised if you are working on ways to also lock voice chat to your selected locale, not transmitting voice messages if the box detects you're speaking in, say, german with a locale set to UK.
Every day I have access to more and more online places where I can buy and get stuff from all over the world delivered to my house @hellhole Mexico and you are going in the exact opposite direction, restricting digital purchases based on geography where the restriction wasn't there before. You are not alone, though, Google with its play store pulls the same kind of shit and after 2 years of arguing back and forth with them to let me spend my damn money on their store they just won't let me, with the obvious result that they've gotten $0 from me altogether. It certainly is not in your best interest to strive for this kind of policy "success".
Is just having it work as it does today with the 360 too much to ask?