And you know what? WPF _is_ nice. I _liked_ Silverlight (but am frustrated that it doesn't work under Linux, though not surprised). Microsoft make _good_ developer tools, in my personal humble opinion.
The problem I see are they still make a large amount of missteps, and don't engage the "tastemakers" of tech anymore. Any goodwill they once had has been squandered, and if you look at Yahoo! you can see that it's super difficult to get it back.
Now that Ballmer is leaving, it will be interesting to see what happens in the future -- will they get a CEO that isn't afraid to take big, bold risks? To cook the golden goose in the short-term, perhaps, to allow for growth into new markets?
Somehow I doubt it, but I wish they would.
Windows 8 has been really good to me; I've installed it (and Office 2013) on all the devices of my family and (ex)girlfriends, my ex has a Windows Phone on my recommendation. They all love it, and find it easier to use than anything in the past. Just today, I purchased a touch-screen HP All-In-One for my Grandfather, and he loves it (and is super excited about using the Kindle app while in his lean-back chair on the 22" screen, synced with his Kindle itself).
When I was working at Harvey Norman, I sold $15 000 worth of Surface and Surface Pros to customers in one month; They were easy to sell as long as you knew how to appeal to the consumers _actual_ needs. They didn't suit everyone, but for those that did no other Tablet came close.
Basically, they have more potential than nearly any other tech company out there. Something has been holding them back, and they've succeeded in spite of themselves. I hope that they can turn it around moving forward.