Yes, Netscape acted stupidly.
Nevertheless, it is rare if ever that a company retained a significant market share for a product once Microsoft decided to kill it by forcibly bundling the same functionality with their 95% monopoly product, Windows.
Microsoft acted stupidly too. Mr. G didn't understand the internet until years after everyone else. MSIE was a piece of junk. The decision to integrate it deeply into the operating system was a security disaster of epic proportions.
The difference between Microsoft and their competitors was that they had unlimited money in the bank and could ship whatever they wanted on 95% of new machines whenever they wanted. Consequently, Microsoft could screw up just as often or even more often than other companies. Most new products only get one chance in the market, but Microsoft products always got a second chance, or a third chance, or however many chances it takes for the competition to give up.