Windows isn't what whas broken. Windows DEVELOPMENT PROCESSES were what was broken.
The two are intimately related. Can you honestly say that you have an example of a program which worked well, despite the development process being completely broken? It just doesn't happen. The article that Scoble quoted quoted Microsoft VP Jim Allchin:
"It's not going to work," he told Gates in the chairman's office mid-2004, the paper reports. "[Longhorn] is so complex its writers will never be able to make it run properly. "
That is a broken development process, producing broken software, and only a little over a year ago. We are in the third quarter of 2005 now, and only now are we hearing of the sweeping changes that Microsoft thinks are necessary to become innovative.
It is absolutely startling to me that a multi-zillion dollar mega-empire like Microsoft only recognized last year that perhaps they should work toward "developing a solid core for Windows".
Longhorn/Vista was broken. Clearly. Whether it is still broken when it ships remains to be seen, but it seems like in a few years, someone is going to have enough material to write a suitable sequel to an old software engineering standby.