I think the reason was a lack of thriving app ecosystem. Microsoft seemed like a much better bet in that regard, they just messed it up in incredible ways.
Yeah, we can look back in retrospect and say it was an obvious failure but that's because of the various insane choices MS made over the years. In the moment I'd argue the decision was nowhere near as clear cut.
Compare that with Maemo, where both GTK+ and Qt were first class citizens and which had an army of developers familiar with Unix and X11 before Maemo even existed.