But anything heavy like Word, IE, Encarta, Visual Studio, etc. were definitely not.
At any given point, old applications are faster and current applications are slow, slowness being unevenly distributed: if you can pay extra for bigger memory and CPU, you get to use the fast lane.
Also consider that companies balance a number of factors: costs for themselves, time to market, features, what the competition offers. New, more powerful hardware is an opportunity for them to make sloppy software cheaper and first to launch.