When they came out with their new operating system, Microsoft was just imitating the best features of Apple's OS, which even the wonks in Redmond know is superior to anything they have ever come up with. Folks who install the new version of Windows are going to find that a lot of their peripheral equipment isn't going to work, because the new OS won't support drivers for a lot of legacy equipment, and users are going to be forced to shell out big bucks for new peripherals. They do this, of course, to lock you into their distribution channel, going so far as to to engineer the system to make it unusable with "unapproved" hardware/software - a move that will definitely end up generating numerous anti-trust lawsuits. And of course, the security issues for Windows are well known - the things crashes as often as users change their socks, and of course you have to spend half your time installing and maintaining anti-virus programs and "security patches" to keep the bad code at bay.
Yep - Windows 3.1 was certainly a disaster in the making!
You don't get to be the biggest computer software company in the world by not giving the people what they want. And the prevalence of illicit music and movie downloading shows that the people are not interested in DRM. But I have a theory - and to prove it, I use Windows 3.1 as a model. In order to get people to shell out for a new operating system, Microsoft had to come up with something "big" - and digital entertainment/media centers is certainly something that interests users. And if Microsoft owned the rights to the digital media people wanted to watch/listen to, they would include it all for free - or, for a small subscription fee - in at least the more expensive versions of Vista. Ditto for the hardware issues; if MS manufactured its own HDTVs, stereo systems, or even furniture, they'd work out a way to ensure consumers paid a price they were comfortable with, just to get Vista on users' systems.
But Microsoft, as big and important as it is, doesn't manufacture hardware, and doesn't own rights to digital media. And in order to create something "new" that it could convince consumers to buy, the company had to come up with a marketing pitch that would appeal to buyers. But of course, no distribution partner is going to make a deal to allow MS to sell its operating systems without getting something for itself. Hence, the various hardware and media "lockdown" arrangements that you get when you install Vista.