The execs saw the Wii launch, analyzed it with their keenly honed business brains, and went "ah, the Miis are why it's so popular! We need this!" and decided that the way to do it best was not to make more extensive ways to present one's self but instead to sell you mostly branded cosmetic items so you can represent your favorite brands and IPs within the consumer device you already bought.
Absolutely fucking disgusting. It was so bad that they couldn't even keep the charade up and had to ever so slightly walk it back with the next major UI update (because another Microsoft brand image needed pushing) so you were not FORCED to create one with your account.