Because their strategy for getting their applications in front of everyone has always been to get Windows in front of everyone, and that meant having to support third party applications that they chose not to try to incorporate into their own apps, but which got enough usage that not supporting them would mean losing those Windows desktops, and thus losing those users of the MS applications that were on every Windows desktop.

It's quite possible that this attributes too much intentional strategy to MS, and also treats them as a single entity with a single strategy more than they deserve. The MS internal teams that were bending over backwards to maintain backwards compatibility were not the same as the teams that were churning out new APIs, building Azure, etc., and quite likely had very different incentives.