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I don't think that's a very weird setup. Sure the router and hub should switch places to direct traffic more efficiently but he probably didn't know better.
Yeah it would be great to be all wireless too but you're forgetting that most networks are hobbled together by adding a few pieces at a time. I'm assuming Office started with a hub and just added the wireless later by taking the easy way and just plugging it in instead of rearranging things better. I doubt he wants to plunk down $400 to go all wireless just to play Xbox either.
Otherwise, I would just switch the router and hub and hook the Xbox to a wireless bridge and be done with it.
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HAL3000
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