They won. The world was running on desktop computers, and those desktop computers were running Windows, and Windows was running IE.

So they rested on laurels.

It had the majority share of users, lots of bugs, and didn't update itself (in the sense that modern evergreen browsers do).

This turned into a chicken/egg problem where apps only worked in IE6. Mitigated somewhat by "evergreen" browsers that update themselves regularly.

They were attempting to replace standards-based rendering with their idiosyncratic version. It wasn't that IE was bad; it was that it was deliberately that way b/c they saw the web as a threat to the desktop, and wanted to Embrace, Extend, and Extinguish it.