Because people write spyware to destroy those pictures of your family trip? Give me a break...
By your logic we should just draw a line under Windows' security right now and assume that the second anything nasty is executed the entire show is over. Maybe in the next version Microsoft can work on faster format/reinstalls?
The Windows architecture needs a major update. Things running as a user should have significantly less access than they do today. But until UAC is in place it is pointless.
No computer should NEED anti-virus. And UAC prompts should become the exception and not the rule, to such an extent that I can put my mom on a user account and she can use her computer happily without getting spyware (*updates auto applied etc).
No, but people write spyware to lift "My Documents" and the internet cache.