If they had spent the last decade making iWorks a replacement for Office (making it handle Excel, for example), they would be in a really good place right now. Instead, it's hard to take them seriously.
It's a far better application than anything Microsoft or Google is giving. Google's only run in the browser, and poorly compared to Apple's browser choice, and Microsofts is expensive, buggy and while it has immense numbers of features it has terrible UI.
No. Again, if they had stopped playing around with the UI, stopped playing with file-formats in a way that breaks backwards compatibility, and instead focused on making the product more useful than Office (especially focusing on making Numbers a viable product), they would be in a good spot now.
None of the points you made are true. Granted things like UI can be very objective, but how someone can with a straight face say Excel is uglier than Numbers (have you seen those awful randomly colored icons?) is beyond me.