The console is your property, however since you are treating it in a manner wich it was not meant for, you lose warranty, you violated a license agreement.
So you are no longer able to play online, using the manufactors network, or get any support, and if the manufactor disables your system, when you attempt to use his network, he practically has every right to do that
But, what about converting a game you do own, or downloading a rom when you own an original cartridge? or a freeware game?
Would it be okay to get Standoff or Saga running on an Xbox?
Say a .xbe was ever compiled, for prophecy, would CIC host it?