I don't think they screw the long game at all. I don't see developers having much choice regarding the OS, so MS needs to deal with their companies, not with them directly. They are also placated with things like WSL, which satisfies many use cases where otherwise someone would have installed Linux or used git bash/cygwin/VM. Or a shiny new editor, like VSCode, and they also have GitHub... Businesses, as always, need things to just work, and in the current climate, that would include handling MS Office formats, and only one software exists that handles them well enough - MS Office. Windows is still bundled with new computers as the de facto free system, running it pirated is easier than ever, you can download from MS directly even. And now every of their offering is also online, bundled with a large cloud storage offering for really really cheap.

I really don't think these offerings can be beaten. It makes business sense to use them, it makes sense personally to use them, and you can't avoid them either, because govts, administration, businesses all use them and expect the people to interface with them over these formats.

I don't feel there's anything stupid about what MS is currently doing. But I DO feel that people are hurt by how they operate.