(Uncited rambling warning)
The first one, although perhaps the argument can be made for all of them. It is really, seriously, JUST a computer that's had a few hours of makeup done before it's big outing. I feel like the designers genuinely felt like they did a good job making it as small as possible and designing it well, but compared to any other games console of the era it was gigantic and unwieldy.
And of course everyone quickly realized this was a $300-ish computer that could do media playback REAL good and promptly used it as such.
I'm curious if using laptop sized drives were ever an option, maybe it was a bit too early for that to be realistic cost wise. It famously sold for a loss it's entire life of course. The blame is usually put down to the cost of the hard drive but I reckon all of the off the shelf parts helped with that. Maybe by 2004 a laptop drive would have been cheaper? Probably not? No way in hell were they ever putting big R&D into it given all of the other issues, not even to make a laptop IDE drive drop in. Better to get the new version out the door.
As an aside, really wish some Smart Person would make a device so any old IDE drive could be swapped into an xbox. Or a whole ODE, either or. So many of them have dead optical drives at this point.