I remember when the Courier[1] demo came out. I was excited about it... Then deeply disappointed when it was unceremoniously shelved. It's speculation whether it would have been a successful product, but I think the idea back then had potential but Ballmer was unwilling to gamble on it.
[PS] On the other hand, he did gamble on long-term things like Azure, so it's not like he made all the wrong bets --but it seemed like an obvious bet to go with something like a Courier, specially after all the buzz it created.