"One" instead of "1" suggests unity and oneness, rather than a version number.
I still think it was an awful branding decision, though.
Considering how the PlayStation has dominated the market without messing around with branding like that, it seems like MS dropped the ball by bike-shedding the name instead of nurturing quality content.
<ArmchairExecutive>
Personally, I think Microsoft should have put way more effort into polishing their Kinect user experience. The X-bone could have been everything that the Echo/Siri/Google Home ecosystems evolved into if Microsoft had just worked harder on polish up front.
Instead, Microsoft pretty much alienated their core gaming base in order to half-assedly fail at a broader goal. They didn't even manage to push through more than a couple of decent Kinect v2 games </ArmchairExecutive>
That felt to me like Microsoft deciding that their original concerns had never been legitimate.