Adafruit Bears Fruit for Microsoft

Several days ago, open-source hardware company Adafruit offered a "bounty" of $3000 for the first person to hack Microsoft's Kinect (formerly Project Natal) device. For those of you who don't know, Kinect was originally just an add-on hardware accessory for the Microsoft XBOX 360 allowing for motion sensing of one's full body (as opposed to using an external device, like the Wiimote in Nintendo's Wii). However, companies like Adafruit saw the additional value in a product like this, and Adafruit offered a cash prize for whoever could first release an open-source driver (not necessary for Linux per se) for the Kinect. (Someone did win and receive the cash prize already.) Since then, dozens of new and interesting uses for the Kinect have come up, including being able to manipulate pictures and videos using just your arms (sci-fi style) and being able to make a movie of you using a lightsaber in real time by having the Kinect track the motion of you swinging around a long stick. The possibilities are virtually endless.
More interesting, however, is Microsoft's response to all this. First, they angrily condemned this cash prize offer saying they don't condone such modifications; furthermore, they seemed to vaguely threaten legal action against Adafruit and/or the skilled hacker. Later, once the prize had been claimed, however, Microsoft backed down from the legal threats, probably because even they knew they wouldn't stand a chance in court. Now, after all this, a Microsoft engineer has admitted that the Kinect was designed to be easy to hack for exactly these sorts of purposes.
So my question is, why wasn't Microsoft open and up-front about this from the start? Unlike Bart Simpson and Nelson Muntz, they don't have a "bad-boy" reputation to protect. If they had been open about this from the start, people who were cowered into submission and inaction by Microsoft's threats would have otherwise tried their hands at the Kinect, leading to more competition and possibly even higher-quality drivers (and even more possibilities). It looks like Microsoft is admitting that it needs to look like a bully even if it really isn't at times; why?