It would be really great if all consoles came with a unique identifier number similar to an electronic serial number on cell phones that could be tied to a persons gamertag just like cell phone # to e.s.n. Once caught/verified boom that console/gamertag has been perma banned. Sure it doesnt keep them from getting another console/username, but it will start to get expensive buying new consoles all the time.
There are some side effects to that idea though, It would pretty much tank the used console market unless there was a way built in to verify the status of a serial number prior to purchase.
Then only the manufacture should have the ability to reset a console during the refurbishing process to avoid retail employes working with their hacker buddies to reset the same console over and over again.