It comes down to this: Microsoft doesn't care about the desktop market. They don't have to. People will keep buying Windows. It doesn't matter how bad the experience gets, the average consumer will still buy it, and the manufacturers will still ship it. Not to mention the desktop market isn't growing. The tablet market is a different story. This is a young market with lots of potential and people are still making decisions. Steve Ballmer is a businessman. He knows desktop windows can be as bad as he wants, and nothing will change. But if Windows 8 works well on tablets, Microsoft might have a new revenue stream. From a business perspective, the desktop Windows experience does not matter, and so it will be designed for the tablet.
> He knows desktop windows can be as bad as he wants, and nothing will change.
If that's the plan, he's in for a rude shock. Given the Vista experience, Microsoft has probably room for a mulligan. They'll bleed a few users, but it will be a flesh wound. Most people who really care won't have trouble skipping a release cycle like they did before (plenty of them haven't upgraded to Windows 7 after all). But if two versions in a row suck, if there's no light at the end of the tunnel... people will have plenty of places to go, and they will.