The problem for them is that their core markets, the desktop and the non-web server, are becoming less and less relevant in comparison to mobile and web-based technologies. When people say the PC is dead, it's not that the desktop computer is dead - the form factor will continue to be popular - it's the local OS + applications + data model that was made popular with the 8-bit computers of the late 70's is losing space to a model where your apps and data reside on servers accessible through the internet using a wide assortment of different devices.
If Windows 8 becomes a big hit, then, perhaps, Microsoft will survive long enough to completely switch its own model of selling software licenses to selling hosted services and the attention of its users through their app store model. In any case, it will be a very different Microsoft than the one that sold me the FORTRAN/77 compiler I used in college.
They have to maintain a viable product lineup to create a smooth transition from their current PC software licensing model (and that includes their w8 app store) to a subscription or service-based model. If they cease to have attractive products for too long, their customers, who are getting more mobile as we speak, will easily move to their competition. And their competition doesn't have the burden of maintaining a lineup transition.
Throughout its history, Microsoft almost always won by persistence, by being there to exploit their competitors' mistakes (and, sometimes, inducing them). I don't see Microsoft having this luxury now.
Of course not, because according to your strong "Microsoft anything sucks" comment history, I don't see how you'd deem anything they could do as right in your eyes...
Actually I am always ready to say how much I love their keyboards (I am on my 4th natural keyboard now), mice (lost count) and I also have a healthy dose of respect towards SQL Server (it IS a very decent database server). The fact I dislike Windows, Exchange, Sharepoint and other miscellaneous infrastructure technologies they build has nothing to do with my opinion that they have bad HR problems, a spotty product lineup and questionable business methods.
If Windows 8 becomes a big hit, then, perhaps, Microsoft will survive long enough to completely switch its own model of selling software licenses to selling hosted services and the attention of its users through their app store model. In any case, it will be a very different Microsoft than the one that sold me the FORTRAN/77 compiler I used in college.