This was the first (and probably only) time you could find Linux machines in most mainstream computer stores. The Linux version was better than XP in every way you can measure: cheaper, faster, easier (more optimized for those 7" screens). And these "netbooks" were just intended for browsing the net, so it doesn't matter all that much which system you run.
I worked at a computer store at the time, and the Linux machines sold poorly. People wanted Windows, because that's what they're used to. Consumers are very price-sensitive, but many opted to pay more.
All of this was a long time ago, but I doubt it would be very different today. Microsoft really doesn't need a "lobby" to keep the majority of machines Windows by default. People want what they're used to, because that's what's working for them. why do you think there is so much complaining every time Gnome or Firefox changes something?