«WSL is tucked away as a developer feature which then needs to download an Ubuntu image which then allows you to apt-get a package. Who’s idea was that?»
It's actually a very old idea in Windows. The NT kernel was designed to support multiple subsystems that don't necessarily act the exact same. We're all used to the Win32 subsystem, but there's been two (!) previous POSIX-inspired subsystems for NT.
This project is (as the Ars article points out) making Lemonade from the lemons of "Project Astoria" which ran and tested unmodified Android apps in Windows 10. Rightfully, Microsoft and the community agreed together that there was a danger here of "BlackBurying" the platform on Mobile here if you could just install Android APKs mostly unchanged. So Microsoft looked at who else could use unmodified Linux binaries in their lives and the answer they came up with was "Developers, Developers, Developers".
The sweet tasty surprise from this Lemonade here, for developers, is that unlike the two previous POSIX Windows subsystems, Microsoft has teamed up with Canonical to deliver us ELF compatibility to the point where they can bundle the unmodified user space binaries of Ubuntu as a Windows 10 "app" for developers.
«That sounds like a terrible development workflow. How do you manage the (sub)Linux system? Is there a os -reset option to give you a new clean environment to develop with?»
It's not a full OS, it's not a VM, it's just Windows running Linux ELF binaries for you. There's no reset tools, yet, but talk of something. That said, there's the Big Reset Button in the Windows Settings and the entire Linux user space you are working in (including all of its users) is stored under your user %LocalAppData% folder on your system and you can use Windows Explorer to wipe it all away if you feel inclined. An "easy" way to get a clean one is just to run under a different Windows account.
«Should you apt-get dist-upgrade to a new Linux release?»
The amazing thing is that you can. The great thing is that you may not have to, it may also be just an "app upgrade" away.
«A proprietary and invisible layer on top of an un-automatable OS is not going to cut it. Developers want dotfile repos, they want text configurations, and they want small and composable tools.»
Windows is not that terrible to automate. There are books and books on PowerShell automation scripts to get Windows to bend to your will from the command line, and more power available to PowerShell in every PowerShell and Windows release. The amazing "secret" here is that big enterprises have been automating Windows for decades...
It seems like the ultimate complaint here is that Windows itself is still not Open Source, but that doesn't mean that this Ubuntu on Windows "doesn't matter" anymore than the fact that you can pull up a bash shell on Mac OS X, a nearly equally proprietary OS, "doesn't matter".