kind of. look at it from the competitor's end. they can't afford to sell at $5, they'd go under. It's like wal-mart putting mom and pop record stores out of business by selling CDs at cost.
So MS keeps their software standard at colleges, which influences students' buying habits (god forbid they grow accustomed to Mac or Linux and lose their fear of them).
It's true...what bright, iconoclastic young thinker applies for a job at microsoft these days? It's a stuffy drone corporate gig, and those are the people that'll gravitate to it.
He basically said that all they have is the desktop...but that even that market is getting chewed away too.
microsoft can be getting hit by web apps and competing desktops simultaneously...no contradiction there. He just chose to choose one as a bigger factor than the other, that's all.
Excellent post. Not only did you nail the growing feeling that Microsoft is gradually becoming irrelevant, but you gave the best explanation as to why that I've seen anywhere.
I think another reason is that younger people are more computer literate and more open to new OS's and software. Mom and Dad were intimidated by computers and just wanted the simplest, most common software (microsoft/IBM), which they'd learned to use at work.