http://www.microsoft.com/investor/reports/ar13/download-cent...
I'm not sure I'm reading it right but, on page 74, it says the "Windows Division" recorded almost $2.1 billion in revenue. There's also a quote in there that 65% of that revenue comes from OEMs (if I'm reading that right). So if they just gave the software away, they'd be $2bb poorer, right? What would the benefit be - would people who are on Apple/Linux switch to Microsoft all of a sudden just b/c the OS is free? What would they sell the people so that they can make up that $2bb loss? I like the question you've asked but CEOs get fired for "losing" $2bb in revenue without replacing it with "hope for a better future".
It's a bit tougher to pull that info from the Apple report - http://investor.apple.com/SECFilingNav.cfm?FilingID=1193125-... - but maybe it's there.
I think it makes sense to keep these worlds/strategies separate. They're also making a ton of money on Win7 so why kill that stream of revenue? They can let it die slowly while they improve/tweak their Win8+ strategy.
Windows 8 license sales account for more than $20 billion in revenue a year, which free Windows 7 licenses would significantly harm.
Microsoft certainly wants people to upgrade from Windows XP, to Windows 8.