Are you sure about that? At least since Word 95, it used what you could call a two-dimensional markup system - paragraphs and character formatting was separated, and character formatting could span over paragraph starts and ends.
for example, the formatting codes could say "from character position 5 in paragraph one to character position 2 in paragraph two, set bold to opposite setting of whatever was in the stylesheet of the paragraph". that would be very hard to present in a WP-like 'reveal codes' view (or in HTML, for that matter)