It is commendable that a company as large as Microsoft would turn on a dime with a flagship product.
It is especially notable that Longhorn (before the 'reset') was not shipped and discarded.
In this day and age, with the expanding number of OSs for x86 systems, MSFT cannot afford a body blow linked to either a buggy or useless product.
Not suffering from arrogance or hubris, the top executives made the right call.
It is interesting that Bill Gates kept thinking of the morale of the current employees of the company during what must have been a gut-wrenching change in their (programmers/engineers) way of doing business. Scratch that, it IS a sea change in the Microsoft
way of engineering their products.
Hopefully, we all would benefit: IT with a more robust product, and end users with security, reliability, and of course, more eye candy.