If it was removed, it was probably misinformed FUD. I recall the post you refer to, it sounded like heresay. Think about it. James writes an alternative firmware for MS (at least until the MS3 came along, which was a great honor to be given the responsibility of writing the primary firmware for), why would B&G be funnelling him money? They aren't even making enough off the hardware sales to quit their day jobs (I believe Al recently retired, but that's retirement).. MS hardware prices have always been as dirt cheap as they can possibly get them.
Personally, I'd like to see the price of the MS3 include some extra amount that goes directly to Ken & James, maybe a "development surcharge" or something, like $5 or $10 extra for each MS3 CPU sold. They won't get rich off even that, but it'd probably bring in more than the donations.