Second, MS would need to port some sort of compatibility layer, which would probably be 10000 person-years to achieve anything like the backward compatibility they currently support.
Third … well, that would be it. The vast majority of non-techies would be ecstatic to find they can upgrade for free for ever, their software would just keep running, and hardware would work basically from day one (because the companies developing cutting edge hardware Windows would pivot their driver development) until the end of time (because FOSS drivers, while slower to appear for most hardware, are supported essentially forever).