I wish I shared your optimism. Remember that most users are not like us - they are happy to have MSN as their start page etc. Consider how many people use Hotmail despite the known security problems. The geeks and techies won't like Hailstorm (the .NET vision that extends Passport to become the central authentication server on the net), and we won't support it (or will we? How many people here are using IE because it makes surfing easier?). But I'm afraid that we are a tiny minority. There are millions of users who will blindly lap up the ease of use that Microsoft promise.
I hope that the other big companies like Sun and IBM kick up a stink about it, and maybe get the DOJ involved - I know that a lot of Americans are against government intervention, but when you have a US company that is out of control, you need to do something to reign it in.
The Open Source community need to make some response to the .NET platform. I've spent a fair amount of time recently looking into .NET and there are several Open Source projects that go some way to providing alternatives, but they all lack the sense of "vision" and integration.
Microsoft have realised that they cannot compete with Linux et al in the long term, and have instead decided to move the goal posts completely. The "war" is moving from the desktop onto the net. At the moment, Microsoft are trying to create a proprietary internet, masked behind the guise of open standards, while a close examination reveals that they intend to be the gatekeepers of all the critical points. Hailstorm is the first indicator of this strategy. We *NEED* a response.