Since it needs the Kinect to operate as well, they could 'theoretically' see who is using the system and help the police out with that as well...
I want no part of that. In no way do I support using these things to spy on people. Now, what would be a not-so-horrible alternative would be this:
When I get my Xbox One, I register it online as MY console. Its MAC address (or serial number, whatever) is linked to my Xbox LIVE profile. If I have my console stolen, I report it stolen. Microsoft then keeps an eye out in its activity log for that MAC address/serial number. When it sees that number pop up in the system, they track the IP address and inform authorities of its location.
That method is less invasive, and is only capable of reporting where a device is located. I'm not worried about that. However, if the whole Kinect spying thing is allowed under those pretenses, I have no faith that the Terms of Use won't weasel in the ability to take a peek at a user for whatever reason at any given time, and I don't like the thought of that.