Wayne,
This one of the reasons that *nix folks have been referring to MS as M$ or "The Borg" for years. Forewarned is forearmed. At the time various M$ execs admitted that they had to introduce a lower-cost OS to compete with netbooks that just cost less because they didn't bear an OS 'tax'.
That said, every dog has their day in the sun, and eventually M$ will be overtaken, just as IBM was before them.
Their approach is part of what has brought about the Free-mium business model, and IMHO that is a good thing.