I truly think that Microsoft knows their market. Web applications are great for the general consumer market, but not for the corporate market. I don't think corporations want their confidential documents directly accessible to another corporation (Google) or to anyone that could guess/crack the password to the service. This is why desktop software is still relevant. For example, the large corporation that I work for has denied access to Google Docs to ensure that it is not used.

Though, Google Docs could be useful to the corporate world if it were possible to install it on a local server in the corporate environment. That way the access to the documents could be directly controlled.