Xbox Experience means I won't be playing live anymore?

Got an email today from Microsoft saying I dont have enough memory for the new Xbox Experience, and if I dont have it I wont be able to connect to live anymore!? I never bought a hard drive, and quite frankly I never will. So I get booted off Xbox Live forever so that Microsoft can rip off Nintendo Mii's?! I best be getting a refund for my remaining Live time!