In the book Barbarians at the Gate one of the co-creators of "Pen Windows" tells the story of that failure and what he told his fellow co-creator. Here's a quote from the book...
[Begin Quote]
"Greg, Look. This wasn't a thing about making money. This was all about 'Block that Kick.' We were on the special team. We were preventing GO from running away with the market. That was our job.
Look, your background is in applications, you have to ship the application. My job is in systems. Systems, for much longer on, has been completely 'Don't let anybody else steal DOS from us.' That's all we're doing. We weren't trying to sell software, we were trying to prevent other people from selling software.
From my view, Pen Windows was a winner. We shut down GO. They spent $75 million pumping up this market, we spent $4 million shooting them down. They're toast!"
[End Quote]
Sorry for the long winded post but I wanted to point out how old this strategy is. .Net wasn't a product to make money it was a product to block Java. By making it the default Windows development environment they were able to do so without flushing money down the toilet (as was done in the example above)
So, as Miguel De Icaza says in the piece, Microsoft really doesn't love .Net the way Xamarin does. They still want people developing for Windows alone. Their developers just happened to create a great tool while management was paying lipservice to cross platform development.