Is it illegal or bad?
-snip-
I don't know what you are talking about. I agreed with you basically (or you with me, whatever).
That's not how Microsoft handles a software license, which is what you get when you buy a game. They don't care at all if you have multiple copies on disc. They only care if you have more installations than you have receipts (i.e. how many copies you bought and so how many software licenses you are entitled to).
So, based on the precedent Microsoft sets regarding software (which is what a video game is apparently), I can torrent any amount of the games, but I can only install and actively use a number equal to my receipts (in this case, 1) that I legitimately paid for.
I would say, based on the above, what the OP is intending to do is perfectly legal and moral.

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