Competition is great! I'm very glad that Apple has managed to exert some pressure on Microsoft here. I really don't think that this would have occurred otherwise.
Two real things:
1) No one ever buys Windows upgrades, so this is a motivator to shift to Win8. Consumers and businesses just buy a new PC and large businesses get licenses automatically.
2) They now have the opportunity of upselling inside the operating system (which they've been playing with for a long time - since 2007!).
That is it. No pressure from Apple.
Maybe I'm in a very small minority, but I have bought Windows upgrades. I don't buy prebuilt computers, but still have reason to keep a Windows box around. Plus, my Mom gets my retired boxes, so I need a couple additional installs at her house. One of those is still an XP box, so I will definitely be taking advantage of this upgrade deal for that.
#2 is also doubtful for the same reason. If users are faced with 900 versions of Windows to choose from while upgrading, they'll choose the cheapest. And if they find out that Feature X requires them to pony up more money through the MS Store, they'll be supremely irritated.
And you haven't really given any evidence to show that it's not related to Apple's pricing.
Windows upgrades allow fresh installs so that's rubbish.
It's a fact of Windows in the consumer market that upgrades just don't happen. Consumers almost always run their computers into the ground, then get the latest version of Windows when they purchase a new PC. This is something you stated in your post, yet you seem to think that MS will magically change this behaviour with this price point. I see no evidence to support that.
Additionally, the MS Store is almost a direct response to Apple's App Store on OSX.
Ignorant OS X users tend to consider Windows upgrades overpriced. That's not true either. It's just a different release strategy. Microsoft can't work on that kind of incremental release schedule without upsetting enterprise customers.
The only real difference is Apple has stuck with the original OS X UI and chosen to refine it, whereas Microsoft throws out the old skin for every release and designs a new one which makes updates seem more drastic. That's just the UI though. Behind the scenes, OS X has made as much progress between 10.0 and 10.8 as Windows has between XP and 8.