I know these vast corporations have to focus but it is still a mystery to me why they let it go. Does anyone have any idea what the thinking was? What has fundamentally changed for them to want to get back to it?
I'm sure this led to the creation of Windows RT and everyone pat themselves on the back.
What you see now though is that MSFT is pushing really really hard into cross-platform play, and investing directly in gaming companies to make sure that the XBOX remains a competitor to the Playstation environment as Sony has been on a roll when it comes to impactful exclusive games for their platform for a while. Their latest E3 presentation really showcased just how much they consider this a priority, and how hard they are currently working to get their own environment of exclusive publishing houses with AAA games up to the standard of Sony. Due to the narrowing of the gap between high powered consoles and high powered PC's in the later years it makes sense that they would do this now as at this point they can offer a flight simulator experience across both platforms that is (hopefully) not only incrementally better, but transitionary better.
The ACES Studio was dissolved in its entirety in 2009 while Don Mattrick (best known for his blunders during the Xbox One's launch and his failure to turn around Zynga) headed up Microsoft's gaming efforts. Despite the fact that it turned a small but steady profit, the thinking seemed to be that PC gaming was dead and that consoles were the future.
As for why it stayed on the back burner so long, the terrain mapping team, the flight physics experts, and all the other specialized expertise in the studio was scattered to the four winds. Did Microsoft rebuild it? Who knows? While the new FS has pretty graphics, the true test will be whether it has the accurate flight physics and global map that FS grognards have come to expect or whether its a merely a coat of paint over a hollow shell.
Kerbal Space Program has mostly replaced it in my mind, though. It's really an incredibly deep game.
"..Thank you for being patient enough to weather the turbulence caused by some of our previous missteps. Thank you for being willing to look to the possibilities of the future while asking us to be accountable for the past. .."
Now the market is gigantic with plenty of room for rebooting beloved-albeit-neglected franchises.
e.g. it's apparently been worth it for them to re-release Age of Empires II (as an HD edition in 2013), then Halo Master Chief Collection (2014). AoE is re-releasing again with a "Definitive Edition", and Halo MCC will be releasing to PC soon.