I think that Excel is already spectacular. That being said, if a C# or similar lived inside excel as a first class language (instead of VBA), that would make Excel unbelievable.

Excel is probably as good as a spreadsheet gets (or can be i.e. a local maximum for a spreadsheet but still way worse than properly written custom software) - my mum works with spreadsheets a lot and watching her I can see that's she's basically programming the spreadsheets when I watch what she's doing

MS has absolutely been using their stranglehold on the Office suite from preventing meaningful competition from emerging. This has an effect on the desktop as well as it's a huge barrier to deploying alternative desktops.

Multiple vendors in this space competing on software quality rather than on compatibility with an entrenched monopoly would benefit consumers to the detriment of Microsoft's shareholders. So yes, MS should and are doing this. The last thing they want is a free market in office applications.