Yes, it could have been DLC. But then again you could also have released Halo ODST as DLC, together with L4D2 and some other sequels I couldn't be bothered thinking of right now. And let's face it: Who's got the space to fit all that on their 360 hard drives? I know PCs can manage, but my Xbox sure can't.
That being said it would still cost the same, with the development taking the same amount of time, and the vast amount of content rivaling a 'true stand-alone game'.
So I guess my question to you would be, apart from having to buy a shiny new disc, what's your point?