The very short answer is that they of course didn't. It's utter nonsense. I was around in those days, worked on Mozilla and Nutscrape etc. Back in the day there were many browsers, all spun off the Spyglass original code, the internet was pre javascript and it was a very different place. Then the browser wars started, there was Netscape and IE and others, back then it was viable for individuals to actually make a competitive browser, but over time they got to be big complex pieces of code, basically a VM. Security became a big deal and the open source movement built the best browsers, Mozilla, Phoenix and Firefox ten years ago. Microsoft tried to get the Internet to come to it rather than the other way round, just as companies like AOL did. They tried to add proprietary technology to lock in the internet to their Windows platform. Can't really blame them for that, but meanwhile every user on the planet was free to install any other browser they wanted. Just because they didn't isn't Microsoft's fault. They didn't prevent you doing so.
These days the internet has shifted from the desktop to laptops to mobile phones and tablets where Apple and Google have the lock in as Microsoft did. Apple allow other browsers provided they don't want fast javascript. Yet nobody's accusing Apple of holding up the internet.
The main things that really did hold back the internet was bandwidth, it was/is the phone and cable companies because they really do have a stranglehold on their customers.
Others here have suggested microsoft tried to stop others from innovating. Again, total bullshit, they forced exactly nobody to use their software.
I am no fan of MSFT, I haven't used their products in years, but someone who was around then really needs to set the story straight.