Well, the issue is that Xbox controllers are already USB, they just have a special end.
It looks like some people have already written Windows drivers, if you wanted to experiment you might look at writing a userspace driver for Linux.
It's kind of strange that they built something custom instead of just implementing it as a couple standard HID devices with an internal hub.
Depending on the USB chip/microcontroller used, it can be a lot easier to just toss in a bunch of vendor-specific requests instead of adhering to all the requirements of an HID-class device (though I haven't analyzed the Xbox controller itself, so I don't know if that's what was done).
Also, there's no need to use an internal hub, as a single USB device ("function" in the USB spec, IIRC) can have multiple "interfaces" that implement different (or the same) classes, such as HID, CDC, mass storage, or vendor-specific.