I've been watching the chatter for a few days now and most of the blogs that keep reporting that is sensationalist interpretation from a single statement Microsoft issued.
Major Nelson confirms Microsoft will do nothing if you only used the exploit for points but it does put your account under scrutiny for things like modding, cheating. All in all, the vast majority of people will get to keep their plunder
http://majornelson.c...clusioning.aspx
@58:30
"Do you take any action against users who use exploits like that?"
"Uh so if you just used the glitch itself, that's on us so we're not gonna take any action against that. If you abused it: turned around and told other people how to do it, if you also in other ways violated the terms of use, well guess what, you've just showned a big bright light on yourself. Yes we know every single gamertag that redeemed those points and we take a good look at their messages, what are they doing, are they cheating? And they may find themselves in a punishment situtation not necessarily because they abused the glitch but they've shown a big bright light on themselves for us to find the other things."