The problem with that is that Microsoft promised backwards compatibility, and the userbase is already famililar with that on the PS2. The way Sony did it for the PS2 though was by including the original PSX's cpu so it wasn't emulation, it could just run them. The 360 user base is basically expecting to get this for free, and asking them to pay would piss of most of them. I personally agree with what you're saying though, I'd definitely pay to be able to play many of the games I have for xbox on the 360, especially if you got upgraded textures.

The thing I'm amazed Microsoft hasn't done is offer a "save transfer". There are a couple games that I can play on my 360 that I've already played to death on the XBOX, but I can't transfer my saves over without a bit of hacking. Most saves are small, so why can't we use some service on Xbox Live to transfer my saves to their server temporarily then redownload to my 360?