The microcode update would need to disable the entire FDIV instruction and re-implement it without using any floating point hardware at all, at least for the problematic devisors. It would be as slow as the software workarounds for the FDIV bug (average penalty for random divisors was apparently 50 cycles).
The main advantage of a microcode update is that all FDIVs are automatically intercepted system-wide, while the software workarounds needed to somehow find and replace all FDIVs in the target software. Some did it by recompiling, others scanned for FDIV instructions in machine code and replaced them; Both approaches were problematic and self-modifying code would be hard to catch.
A microcode update "might" have allowed Intel to argue their way out of an extensive recall. But 50 cycles on average is a massive performance hit, FDIV takes 19 cycles for single-precision. BTW, this microcode update would have killed performance in quake, which famously depended on floating point instructions (especially the expensive FDIV) running in parallel with integer instructions.