I wouldn't be surprised either, there is plenty of room on the console for a power button. I am still leery about mass production though, Microsoft has a bad track record with that; I don't feel like reminding people of the RROD though.
It would have to be a rather large disparity for the install base to become the deciding factor. And I think the popularity of Kinect will be more of a deciding factor than people think. Remember that the Wii was by far the most popular console of the generation.