Microsoft didn't want people to compare "Xbox 2" to "PlayStation 3".
Microsoft has a very... interesting history with names. While rival Sony likes to keep things simple (PlayStation, PlayStation 2, PlayStation 3...) each iteration of the Xbox so far has come with a completely new name, including the most recently revealed "Xbox One". If you thought naming the third console "One" was strange, then it may interest you to know that Microsoft considered naming the Xbox 360, the second console, the "Xbox 3".
"Certainly Xbox 3 was actually on the list because, well, you've gotta catch up," former Chief Xbox Officer Robbie Bach said on the latest episode of IGN Unfiltered. "You don't want to be Xbox 2 compared to PlayStation 3. We actually talked about that," he added.
"You don't want to feel like you're a generation behind, so why not skip?" he continued, noting that "Microsoft has a long history of skipping numbers." Certainly, I'm sure the company's rather odd decision to skip Windows 9 and go straight to 10 will be fresh in most of our minds.
It's certainly not the stupidest name for a console successor I've ever heard. At least it would have been clear that it was a new generation of the console, as opposed to the Wii U, which so many people thought was just an add-on for the Wii.