Comment by Joeri

The ecosystem was never uniform. In the 95/2000 days there was a lot of 3.11 UI everywhere, in the 7/8 days a lot of XP UI. Office always had its own UI conventions, often being the playground where new ideas were tested.

It's not so much that microsoft let things go as it was taken from them. When computers became networked we needed ways of easily distributing applications across that network in secure, reliable and always up to date ways. Windows never had a good solution to that (not even today), because every install was fraught with peril, and every app had to roll its own update mechanism. Meanwhile the web was sandboxed and up to date by definition, dramatically lowering the barrier to entry for networked software. Anything that could move to the web did move to the web, which opened the door for chromebooks, which in turn fragmented the OS market, which made it uneconomical for companies to invest in a windows native codebase. Microsoft could have stopped this had they leaned hard into the concept of an app store and sandboxing around 2000, and hadn't stumbled so badly when it came to extending windows to mobile.

I'm pretty sure that modernizing the entire windows UI doesn't change a thing for windows market share. But the reason to do it is not because it makes economic sense, it is because they should have pride in the products they make, and want them to be well-made.