It's very simple, some of the older models had dvd drives without any foam rubber pads in them, so if the disk tilted for any reason (due to heat, vibration, moving console etc) while spinning you get a nice big dirty scratch from where the disk made contact with the dvd lens,
The foam rubber pads block the disk from reaching the lens, most dvd drives have these, Microsoft probably thought they could save a few pennies leaving them out.
I had one of the consoles in question, destroyed 3 disks, Microsoft finally replaced my console, but you wouldn't believe how hard they made it, they said it was my fault it was scratching disks...
"do you have your tv's sound on?"
"It could causing vibrations and you're not to move the console while on"
Eh yeah! Except the fact I never once touched it or even breathed on the bloody thing when it ate my disks, I finally got them to change it only after citing a Dutch TV documentary that highlighted the scratching problem.