Undercutting your own existing, successful business with a new business better prepared to go into the future.

Specifically, think about Office. MS could have released a web-version of these at a price-point that competed with other web office stacks. Doing so would have put them in position to succeed in the Internet world, but it would have gutted their Office profits in the process.

Given their cost structures are set up around those profits, no sane business person will make that decision. Hense, the dilema: you can see you are going to die to companies who change the rules, you know what you would need to do solve that, but the economics of doing that would mean anybody who really tried would be out on their ear.