Yes, Wordpad occupied an awkward middle ground. But it was something you knew Windows users had access to. It was relatively small and lightweight. Grandma could write a letter without having to deal with Word. There was no upsell. It was limited but also generous in a way -- like someone said, "we can't ship Windows without at least a basic word processor built in".
To me it's emblematic of a time when software tried to be self-contained and to serve the user, when operating systems (Windows in particular) had consistent interface conventions between programs, and when there was some consensus about what people could be expected to have.
Now, you'd probably point Grandma to Google docs. Which would be a little heavier, a little laggier, yes more capable, but also somewhere out there, a service, a thing available only thanks to the largesse of Google, a thing that can be taken away at any time, a thing that fosters dependence.
Its removal is consistent with the ongoing enshittification of Windows.