The Sega Genesis had many games that were ported from the arcade, most of which ran on the System 16 board. The Genesis was pretty powerful for its time and its games were close to their arcade counterparts as a whole. But, it wasn't quite as powerful as the System 16, so Sega couldn't just run the exact arcade games on the Genesis that ran on System 16. When you compare them, it seems like Sega copied the sound and graphics from the arcade versions as closely as possible, but didn't and/or couldn't use any of the source files/code from the arcade versions, resulting in the Genesis versions looking and sounding slightly worse. Here's a comparison between the arcade and Genesis versions of Golden Axe:
Now, kids who spent years playing NES and SMS games, were quite happy with the arcade adaptions on the Genesis. We were used to game companies taking the names of arcade games and giving us completely different, usually bad versions of those games on the 8-bit consoles. Here are some examples:
Given the fact that cells phones -- let along modern gaming console -- are powerful enough to run the arcade versions these games, if they're going to release them on XBox Live Arcade or the Playstation Network, there's no reason to not release the better, arcade versions, right? That is what they did, thankfully, with Shinobi. I'm sure they didn't even consider releasing the Sega Master system version.
For some reason, however, for the Sega 16-bit classics like Altered Beast and Golden Axe, they chose the Genesis versions over the arcade versions. Now, even if they did release the arcade versions I wouldn't buy them (they're good games that are still fun to play, but I'd like more enhancements to make them worth re-purchasing), but still, why not use the best versions available?
The story with Phantasy Star 2 is slightly different. That game, being an RPG, never came out in the arcade and was a Genesis original. That is the version on XBox live arcade. However, an enhanced remake was released for the Playstation 2 in 2005 called Phantasy Star Generation 2. It looks like it was only released in Japan. Now that would be something I'd be willing to buy for XBox Live Arcade. I have very fond memories of playing the original on the Genesis. I'm not interested in playing that version today, but a version with enhanced graphics and sound would be quite attractive. Give us that version!
This should be obvious, but people interested in buying remakes/re-releases of games on XBox Live want the best version of the games to date. Anything less = guaranteed no sale (from me, at least).