This indicates to me that you've never worked in a software company like Microsoft. EVERYTHING that Microsoft does is under a huge amount of scrutiny, and any change to anything generally will piss someone off. So they are careful with every change and they have to be thorough.
It's not just a few months worth of work. Sure, the development change of the UI could be done in a couple of days. But the design first has to be hammered out and agreed to. It has to agree with how the rest of the system would behave. Not to say that this dialog box was in agreement with the rest of the dialog boxes from XP to Windows 8, but if they're going to change it now, then whoever makes the change would need to make sure their version does. This would take man-weeks of meetings just to get right from the PM and designers, etc.
But then there are QA changes that need to be done, just to test it, so add on a couple of weeks for that. It would presumably break all of their automated testing, and then new tests would have to be created. Ballpark figure just for that is 4 man-weeks of QA work.
Then, are there any dependencies on the older version of the UI to other products? Not sure, probably not but it would have to be researched.
What about documentation changes? Not only will the Windows documentation need to change, but then all other software that references adding environment variables need to change. And now, training videos will have to be changed. Don't forget that Microsoft has a bunch of training classes that they offer.
Will enterprise customers be impacted by this? Not sure, but they would probably want to reach out to their most important ones to figure out what
Now, take all the time estimates and then figure out how this compares to other bugs that have been lingering for years as well. Is the current functionality unusable, or is it just kind of sucky. If it's just kind of sucky but people can live with it, then time is probably better spent on other things.
Do this about 6 times on the most widely used piece of software in the world, and you have yourself 20+ years.
Should this dialog have been changed years ago? Yes, it sucks, and almost embarrassing. But it's still usable, so it has relatively low priority. This is how software decisions are generally made in enterprise software companies, especially those like Microsoft.