I can understand why Microsoft would not want Steamworks integration.

Steamworks is a direct competitor to Xbox Live -- achievements, friends list, chatting with friends, update delivery, etc. By allowing Steamworks on Xbox, it dilutes their own service and would confuse some customers ("Why do I have two friends lists?", "Why do I have two profiles?")

That being said, I really do want Xbox live to open up more. I think it's ridiculous that most Xbox games can't talk openly to the internet -- this prevents me from making an Xbox port of my game.