Why not let others take the risks of innovation and just copy what works if you can get away with it? Much cheaper that way and you get the benefit of creating a refined product.
For example, while Windows 7 has copied from Mac OS X, the resulting product is actually very good.
The more interesting (and difficult) question is to what degree their overcoming the lack of first-mover-advantage was due to a superior product, and what degree was due to leveraging their strength in the OS arena.
Products that stand on their own merit: MS Office (though PowerPoint looks like the one most in danger of being passed), XBox (it's not #1, but it's clearly competitive), Visual Studio (destroyed the competition)
To me, it looks like Microsoft's winners by and large win by delivering a quality product, not being bundled with Windows.
I think Microsoft sees itself as a "platform" company, not a "product" company. In that context, it doesn’t need to be first to win - it simply needs to be the best at integrating the pieces into a cohesive unit. Platforms are for dealing with general problems and not specific ones, so individual features may get copied or innovative companies may get bought when you’re trying to build a common base that a large number of people can build on. The strategy of keeping an eye on what’s being done and incorporating the best and trying to improve on it sounds like a smart business strategy for a platform company to me.