It took a broken console for me to work out exactly why playing shooters on a thumbstick gives me hives.
With the XBox out of commission, I went back and finished Darwinia, Introversion's charmingly odd RTS. Darwinia uses a kind of FPS-like control system: the mouse moves a cursor around the screen, rotating to keep it close to the center of the view pane, while movement is controlled using the standard WASD (or in my case, WAXD) keys. In perspective, the game reminds me of Black and White, but without that game's idiotic mouse-only policy. Remember movement in B&W? In order to travel somewhere, instead of using a perfectly-reasonable autoscroll, players had to click-and-drag, like moving Google Maps, but without the ease of use or search function. Doing that for an hour at a time was an exercise in repetitive stress injury.
Darwinia, being far more sensible than B&W, uses the same basic principle that shooters use for movement and selection/aiming: it creates a direct connection between mouse's physical movement and the onscreen change in view arc. The reason this works is because computer users have been training for it during the entire life of the GUI. When the mouse moves a certain amount, the cursor moves correspondingly (factoring in a natural acceleration factor). In 3D space, the entire view moves instead of the cursor, but the relationship between physical change and virtual shift is preserved.
Compare to aiming with a thumbstick. Now, if you want a certain amount of change, you can't move the corresponding amount with your hand. Instead, you have to hold the stick in the desired direction for a variable length of time, then ease it back into position as you reach the target. If the target is moving, you can't follow its movement directly. You have to match its vector, both in direction and in amount (scaled to the bounds of the joystick).
Is there a way to solve this, and to make console shooters less tank-like? Probably not. You can't link movement directly to thumbstick position, because there's no way to reset the view center (you can't pick up and move the stick to its new position like a mouse). One fascinating idea I've seen is to replace the thumbstick with a trackball--as a long-time Logitech Marble user and RSI victim, I heartily approve of this idea. It will, of course, never happen, even though it would be tremendously awesome.
But short of reinventing the hardware, which no-one but Nintendo seems interested in, designers can at least minimize the annoyance. I noted, while I had a working XBox, that I found Gears of War much less fiddly than most shooters on the platform, probably because its emphasis on cover lowers the importance of precise aim. Gears gives much higher priority to movement, where consoles have an advantage in analog control, for getting behind cover and spraying suppressive fire. It also uses the cover mechanic as a way to guide players into a two-level stick sensitivity--when popping out for aimed shots, the view zooms in to make up for the stick's imprecise movement. Finally, the art design in Gears strongly supports the "feel" of its control: tank-like aiming seems natural given the hulking, ungainly build of Fenix and the other characters, in a way that it feels unnatural for most nimble FPS protagonists.
The best argument I've seen for why mouse hasn't been added to XBox, given the USB ports that could obviously support it, is that it would segment the player population: mouse users would have an clear advantage over the others, an advantage they would have effectively gotten by paying for it. It's unbalancing to give players with more money a leg up, and I can see why they want to avoid it. But when I'm playing the single-player campaign at home, I'd like to be able to do it in comfort instead of fighting constantly with the controls. The inability to do so is a constant source of frustration. Of course, this is a microcosm of the entire console-vs.-computer debate--my preference for an adaptable, hackable platform explains why I identify as a PC gamer in the first place.