But I think they're a perfect example of what it would be like if Microsoft controlled the hardware. (Like they tried to do with Palladium.)

Yes, Apple is in essentially this position, controlling the hardware and software. And yes, there are people who say they are as evil as Microsoft. But the difference IMO is that they generally sell directly to end users. Which means when they decide what you can do with your stuff, it's based on what they think you want to do with your stuff. Or at least what you should want to do, if you've got any taste and style.

So much of Windows is driven by what corporate buyers and corporate IT shops want, or what the MPAA and RIAA want, that actual user preference is secondary at best.