Microsoft's development tools were lagging behind Borland's tools in the 90s, but those tools were top-notch nonetheless. Did you know that there are people still happily using Visual Studio 6.0 (1998)?
Also, if you're referring to Anders Hejlsberg, being the lead architect of C# doesn't qualify as "sit on their thumbs". Considering that .NET is one of the 2 competitive advantages that Windows still has in the corporate environment (the other being Exchange), I think it was a million dollars well spent.
It pains me to admit it but the point still holds. I've lost count of how many places I've seen that have an excel farm cranking stuff out over the last 15 years. Even when they don't go down that path, microsoft technology works (quiet in the back) really well with the rest of the microsoft technology stack (in comparison to with anything else anyway, although it's better these days).
Also, if you're referring to Anders Hejlsberg, being the lead architect of C# doesn't qualify as "sit on their thumbs". Considering that .NET is one of the 2 competitive advantages that Windows still has in the corporate environment (the other being Exchange), I think it was a million dollars well spent.