To Vandrel: I agree 100 %, BIS' work is its own unique genre. Its an amazing accomplishment that has no equal, and it certainly could not be transferred to the 360 in its entirety. Remember this point of this topic is a purely academic think-tank of how the infantry and gunplay portion of the ARMA experience could be implemented for the 360 in a way that does not diminish the simulation and depth of a BIS product.
Look, as far as whether or not they should do this, I think BIS could create an excellent, squad level infantry game for the Xbox360, that, with proper implementation of a control scheme for the 360 controller would blow every other console shooter out of the water. The depth and challenge introduced by having BIS' projectile ballistics gunplay as opposed to hit-scan gunplay would alone raise the title far above anything an xbox360 gamer has ever experienced. Instead of the full sandbox nature of ARMA2, BIS' 360 release can be a single player campaign, again squad level infantry. Use the same engine so you get the same freedom of choice in accomplishing objectives and you get the same unpredictable nature of the enemy movement and behavior. Iron out the bugs, bring back the scale (view distance, map size, mission boundaries within the map) to something doable on the 360.
We have had the pleasure and sense of accomplishment of making a clutch lead off shot on a target running full speed 500 m away right before he successfully finds cover, but xbox 360 gamers have not, and for many of them such an experience would be an epiphany. The game would sell very well and may win some very prestigious awards.
BIS owns this genre, they will not get corrupted into making something generic. They have a pride in what they do because only they can do it, and because only they can do it, business sense will have them stay true to their monopolized genre and continue to advance it to our benefit.