She was seen as a huge step up from the guy she replaced, who was rumored to have been having an affair with an underling[1] at the same time that he recorded a video admonishing us to never have inappropriate relations with subordinates. He was also responsible for the infamous towel debacle, which came to define the worst aspects of penny-wise, pound-foolish cost-cutting at the company.
Edit: Thx to, uh, moron for pointing out the new Mini-MSFT post that includes this:
Is she really the most universally hated executive?
I don't know about that, but she certainly slipped away from being loved.
Thousands of employees used to cheer for her. Now?
http://minimsft.blogspot.com/2012/07/microsoft-fy12q4-result...[1] In the (admittedly anonymous) comments: http://minimsft.blogspot.com/2006/06/locked-doors-martin-tay...