Well that's one way to spin a monopolist giving away a bundled product for free and reducing the incentive for others to enter that market.
Sure MS leveraged their dominance in the OS world with brutal effectiveness, but Netscape was far from the ideal browser. In fact, Opera was our "Firefox" of the time as it could fit on a floppy disk (I'm dating myself here) and seemed lightweight in comparison to even IE.
Speaking of FF, Firefox was born out of Netscape's overall crappiness/bloated nature. IE didn't start sucking until after the US gov came down hard and MS essentially threw their hands up and abandoned innovation as a result of being pounded in the courts. Firefox re-lit the fire of web innovation (along with the whole web 2.0 movement and post dot com bubble rebuild) and then Google simply out Firefoxed Firefox with Chrome.
No? Well that's my point.
And IE sucked from the very beginning, each and every time Microsoft could get away with it sucking due to lack of competition. Where was the spell checker? Clearly veto'd by the Office team, till IE10.
The "most innovative" browser took till 2012 to figure out that people wanted to spell check what they typed into a browser, or they intentionally hobbled their industry-crushing browser to benefit their older cash-cows. Either way it's bad. It had to be just good enough to starve the competition (and often it was easier to do that with "innovations" in bundling, lock-in and other dirty tricks than it was with features, speed or security) and then they left it to rot, when we had no other options to turn to and it took a concerted community effort to make many websites even bother to support any browser other than IE.
Also, MS didn't make IE "just good enough" they integrated the browser into the entire OS! Good or bad, they made a huge bet on the web as the future but when the DOJ essentially slapped them down they said "fuck it" and starved the market for half a decade until FF came around and the government/public had moved on from the whole Netscape fiasco enough for them to start giving a shit again. Why would you innovate on a product with the potential that any "feature" you added would put you back in court against the US Government. No thanks.
Though, I have used Firefox since the days of Phoenix, back when some of the most important bugs where for evangelists to convince important websites to support anything other than IE (often just IE on Windows, since the Mac version was different, technically better, yet worse because lots of things didn't work on it). Presumably this is why everyone else thought IE was "better" since most of the web was written for it, and it alone.
But there were other browsers, remnants of a once thriving, competitive market, e.g. Omniweb for Mac OSX had inline spell checking in about 2000 (might even have had it back on NeXT). Safari launched with it in 2003 I think. There were plugins for IE and Firefox from around the same time. Firefox was held back because the Netscape spell-checking code (for the email component) was licenced so that was something that got ripped out when Mozilla was launched. Even so, they beat Microsoft (which had more money than God and had already written the most used spell checker on the planet) by 6 whole years!
Apparently, You never participated in the IE4/Nashville beta. Shortly before Windows 98 took the world by storm, Microsoft unleashed a new Beta of Internet Explorer for all the people who drank the kool-aid of Dynamic HTML that was being marketed at the time. One of the "features" of the Nashville beta was the HTML-ifying of the desktop and file manager. Now, everyone that's used Windows since knows that you can right-click on the desktop, and hide desktop icons. This was considered a feature in the Nashville beta, because it gave more screen real estate to .htm files you could create for every folder, including Desktop. Before uninstalling the (crashy) beta, I spent a good 2 days with all sorts of spinning .GIF files on my desktop thinking I was the coolest person ever. Eventually, I realized my PC was performing at approximately half it's normal speed, exhibiting symtoms such as Explorer taking 45 seconds (I benchmarked) to render C:\WINDOWS\system32 with HTML, and did a full Win95 reinstall in order to remove the tendrils Nashville inserted.
I'd say IE4 was when it "started sucking", myself.
Otherwise, Microsoft rewrote the browser so that the components could be used by other programs and by outside developers, so it wasn't a bundled product, it was integrated into the operating system. This might have been a mistake (or not), but it was required because Microsoft had already signed a consent decree with Janet Reno that stated that Microsoft was allowed to add to the OS but not to tie separate products.
Life is hard when politicians interfere with software design.
Componentizing IE resulted in it being a better browser than Netscape, and made it much easier for third parties like AOL to adapt it using the SDK Microsoft provided. Netscape couldn't offer that, though it probably wouldn't have: Netscape prevented third parties from changing Navigator, and it could only be downloaded from Netscape.
Netscape finally lost for a lot of reasons. One was because it decided to rewrite its crap code just as Microsoft had done. That meant it stopped shipping new browser versions with new features. Its market share plunged and AOL, which had bought it, decided to make it open source, which is where Mozilla came in....
Incidentally, Microsoft didn't run into the same problem because it had two browser development teams working in parallel, one on the old version and one on the componentized version.
It would have been possible to keep the core HTML components without shipping a functional browser frontend.
It would have also been possible to make these core HTML components versionable, so that a given Windows version could offer multiple versions of IE at the same time.
The fact that they failed to do both of those things wasn't the fault of the courts. Some of their design decisions were explicitly made to make the browser itself appear more integral than it really was.
Who else had an OS that mattered? Apple had single digit share, maybe < 5%. What other OS do you have in mind?
BeOS? Sun? NeXT?
This was mostly back in the 28.8 and 56.6k modem days, and Netscape's caching of content was a joke:
Resize Netscape's window and what does it do? It would block (single thread) and re-download the content (HTML, images) instead of using the stuff in its cache. You could wait 30 secs before you were reading your page again. IE would instantly (well, disk cache and then re-render) redraw the page - on most non-heavy pages, you could interactively resize the window with no issues.
Netscape also inconsistently progressively downloaded content - something IE could do very well, making for a much smoother browsing experience.
From a UI perspective on limited connections, the difference was like night and day.