Paul, excellent article. I have two additional reasons behind why Microsoft is "dead."

Reason (5): Steve Ballmer took over from Bill Gates as CEO in Jan 2000. Chief Sales Guy takes over from Chief Egghead and the company stops building products for its real users.

Reason (6): Web 1.0 hiring. Microsoft hired a huge number of people in 1998-2001, people who were too stupid or incompetent to get a job pretty much anywhere else. The good people all went to web startups then. This was the first crack in Microsoft's "we have the world's best people" armor. B players hire C players, and it goes downhill from there.