Alright I'll admit the nuances of this argument .. I mean discussion, are lost on me so can someone please answer a question for me?
My understandings / assumptions:
1) As I understand it the law has provisions for the owner of a software license (i.e. a X-Box game) to make 1 copy to use as a backup to protect his / her investment in the software in case of damage. Correct?
The Fictional situation / The Questions
My 7 year old picks up my Xbox while the disk is spinning and the Xbox trashes my game. <Boo hoo> Luckily, I made a backup <Yeah Me>, But my unmodified XBox won't play it <Boo Hoo>

How does my back up copy of my legally purchased game protect my investment? (i.e. how do I get my game replaced?)
It sounds to me like Microsoft, Sony & Nintendo are breaking the law (or at least the spirit of the Backup Law) by making it impossible to play your 1 legal back up. That being the case why aren't they being publicly crucified to serve as a warning to other companies by the federal government?
Those defending Microsoft and the Prosecution please enlighten me to the error of my reasoning.