I usually think Michael Pachter talks a load of crap, however i do agree with what he's saying there That's probably true, your average consumer / parents who purchases probably wont know until the console has been purchased and either have a problem getting it online, or realise it cant be used offline. The problem with those people will be there not tech-savy enough to figure out how to connect it to there wireless router, or there poor router from there ISP will give them connection issues. Something i've seen with BT Home Hubs (popular and very bad router) here in the UK. I honestly think it could still go other way, if Microsoft get a handle on the bad PR now and meet gamers half way it will all be forgotten about by this time next year.
I think to be honest with laptops and smartphones as popular as they are, most home users now will know their Wireless name and password. The biggest issue is internet being down, not the original connection. Hopefully the check in process won't overload the BT Home Hubs.