It sounds like Microsoft's attempts to make the 360 a standard for multimedia are falling down. We've had the Netflix issue with them breaking the interface (any time you update an app and remove features/functionality you've made a huge mistake) in the latest release and the less than incredible experience for the rest of the video apps (at least here in the UK people don't really care all that much - my PC hooks up to the same TV as my 360 so I don't gain anything from it but when I tried LoveFilm* it seemed perfectly serviceable but people have generally been saying none of the services are that great and PS3/Wii/PC have been offering these kind of things for ages, we even have catch-up TV through official YouTube channels as well as bespoke webapps from the content providers).
Now it seems like they really messed up their plans to make watching sports better than just looking at the TV. Doesn't sound good from that report about their PPV UFC service.
* English for NetFlix (only run by Amazon UK and also integrating GameFly)