Microsoft's entire business model is holding corporate IT hostage. All their apps suck, except maybe VS Code. There's no reason to choose the Microsoft stack over Google Workplace or Zoho except, well, inertia. And there's a lot of that...
Maybe it's cuz they're one of those companies that sell to management instead of users. Maybe the pitch isn't "your users will love us" but "we simplify IT fleet management for you, and your users... well, they don't have a choice, so don't worry about them."
Could they really not have bothered just going that extra mile to do both...? None of their products HAVE to be terrible... they just need love and focus :(
As an aside, though, why do you hate VSCode? I use IntelliJ myself but most of my colleagues use VSCode and love it... yours is the first bad review I've heard in a while. What's terrible about it?