To manage for innovation, one has to be willing to say "wow, compared to that new thing, our stuff sucks." It just never seemed like Ballmer thought that way. He seems like the type of guy who perceive a thought like that as disloyalty or something.
Take Windows Phone. It's a great OS. The only problem is that it came too late and had poor marketing (and was associated with the uncool Windows brand). Technically, it's awesome and in the same league as Android and iOS.
The same is true for Xbox, Windows 8, C#, SQL Server, ASP.NET MVC/API, Azure, etc.
Google or Apple would build the exact same products, and people would probably love them.
So no, I don't believe that Ballmer's love for Microsoft (especially recently) was unjustified. He simply failed to account for the negative popular perception of Microsoft and its brands.
The same inertia that keeps Windows popular is preventing Windows Phone from gaining significant marketshare.
You would think that, of all companies, Microsoft, the abuser of platform lockin, would grok this.