I don't think an old anecdote about GO/WfP sheds much light on the birth of .NET.
Microsoft wanted the goodness of a managed platform, while having the freedom to evolve it and generally make it a) not suck as much as Java, and specifically b) be better at interoperating with existing (Windows) software. .NET clearly wasn't rushed out the door as a panic response to Java. .NET arrived years after Java & J++. MS just realised that managed was the way to go for a lot of development activities.
Java was and still is available for desktop programming, but by now C# has clearly evolved to be a better language, and .NET a better platform for developing (Windows) desktop apps.