It seems likely to me that Netflix could efficiently rent out games via download on Xbox Live.
Whether or not they could stream games, ala OnLive, is debatable. But they could allow XBL users to temporarily download games as Microsoft does with movie rentals. Big downloads, for sure, but the Xbox 360 does allow things to be downloaded in the background or while the console is only partially powered up. And at least some games could be played once a portion of the game is downloaded, allowing gamers to play while downloading the rest, ala Microsoft's movie service.
I would pay an extra 10 bucks per month for that. Would you?