You might think the technology sucked, but all the competition sucked worse, much worse. Nobody else could be bothered maintaining so much backward compatibility. Apple kept changing their CPU architecture and resetting the clock on developing apps. Other platforms like Amiga also pursued their own platform blind to the fact that their products couldn't interoperate with the most popular and cheap software and hardware. There was OS/2 Warp which for some reason failed in the market. Probably more of the same incompatibility problems.
It's hard to see that the world would have been better without MS. It could very well have been more fractured with people having to buy two computers because they would never know which one would run the software or hardware they might want to use. Or it could have been like the disaster we have today with native mobile development - you have to program everything twice, for two different platforms! What a waste of developer time.
The gist of what you say about MS now applies to Apple today. It keeps a similar grip over iPhones, and people love them for it. It's that grip that makes Apple successful, just as Microsoft's grip over PCs made them successful. The smartphone world would surely be worse off today without Apple too.