Damn, you must really love MS, I can't think of any other reason to defend them the way you do, at least Ameesh works there.
Who decides what is a vital part of the OS?
An OS won't work without a memory manager, all OS's I know of, except Windows, work fine without a HTML rendering engine, hence, a memory manager is needed and a HTML rendering engine is not.
Microsoft didn't "deny" anyone anything. If anything the OEMs accepted the deal as part of their Windows licensing agreement so if anyone was denying someone anything then it was them. By themselves Microsoft have absolutely zero control over what is installed on a desktop PC.
They accepted it cause they had no choice, cause MS is, for all intents and purposes, a monopoly in the desktop/office market.
So if you have a majority market share it is now illegal to produce superior products that people choose to use over others'?
Supperior products? That's not what it's about, it's about MS locking it's customers into an MS environment since their products are intentionally made to be uncompatible with all other products on the market(except of course, when MS actually has to be compatible with something to compete).
Take Intel vs AMD.
Intel is a far larger company, with far greater resources, but AMD can still compete because they can make fully compatible chips, so AMD does, to a great degree, make it's own fate.
This isn't the case when a company tries to compete with MS, because of the above mentioned reason.
It may or may not be illegal, but it certainly isn't desirable for the customers, less competition always means you pay more for less, I don't quite understand why you fancy the though of one company controlling an entire market so much?
I would prefer to have several companies competing, it promotes innovation, better prices, and overall better products, see the video vard market for example, but if this isn't something you want...well you're just a strange fella I guess, from my point of view anyways.