Basic Requirements
Gaming online requires a smooth connection to keep play enjoyable. Lag is the biggest enemy of the online gamer, which is why Microsoft insists on stable connections capable of at least 256 Kbps in downloads and 64 Kbps in uploads at all times. However, the faster the better, and most gamers now agree that at least 2 Mbps is required to be competitive.
Wired vs. Wireless
The less interference a connection experiences and the less distance data has to travel, the better. Therefore, totally wired connections are the best, as in a solid cable from the wall to the Xbox 360. However, routers are acceptable because the source is still wired.
Latency
The physical distance data has to travel from point to point causes a delay known as latency, or ping rate. Satellite Internet bounces all over the planet and into space, unlike cable and DSL, which are all-terrestrial. As a result, satellite Internet suffers from huge latency, making it unsuitable for gaming.
Consistency
Satellite connections are also less reliable and consistent than other types because data is transmitted based on satellite availability and exposure. Even moderately inclement weather can cause total disruption. Additionally, satellite-based bandwidth is more scarce than ground-borne bandwidth, resulting in inconsistent service.
Bottom Line
People choose satellite Internet in areas where this is the only option and as a last-ditch effort to get online. Gaming doesn't meet these criteria and needs a hefty, solid connection to work. That's why Microsoft doesn't support satellite--the nature of the connection would cause too many Xbox Live-related problems, not to mention plenty of upset customers.
Future possibility
Theoretically, there's nothing stopping satellite from meeting Xbox Live standards given enough redundancy and reliability. A satellite connection with sufficient bandwidth and uninterrupted access could work if the Xbox Live system doesn't "discriminate" against it. However, as of late 2009, this is entirely academic.