Contrary to what you seem to be suggesting, in 1996 Macs ran full color 3D games, could use large screens, and they were known for its graphics – remember that MYST was made on Macs. System 7.5 was a great OS, it just didn’t have the modern features that Win95 had (protected memory, preemptive multitasking.) Also, let’s not forget that before the release of Windows95, the Mac’s OS was way more advanced. We’re talking about a rough patch of 3 years.
Because XP was feature competitive and there wasn't much market pressure to do so, unlike OS7,8 from that era.
This is quickly becoming a OS war, but I think its uncontroversial to say that the few years before OSX showed us an Apple that couldn't compete and was selling products that were substandard and overpriced. 95-99 was pretty rough.
I would say 1995 to 1997 were the dark days. Not because MacOS wasn’t working well (even though its aging architecture did mean it needed to be replaced someday.) Apple’s problem was one of focus. They had too many product lines, too many managers, and too many mediocre sales locations.
Steve Jobs’ return to the company changed all that. He killed most projects and fired a lot of people (after Gil Amelio had already done his fair share of firing.) Apple released great products again far before Mac OS X came out. The iMac was introduced in May 1998.
I don't believe that Windows 95 have protected memory or preemptive multitasking. That came in with the NT versions of Windows. I switched to Windows in 97 when NT 4 came out. The Mac OS was definitely lagging behind NT around that time period.
“Microsoft made preemptive multitasking a core feature of their flagship operating system in the early 1990s when developing Windows NT 3.1 and then Windows 95. It was later adopted on the Apple Macintosh by Mac OS 9.x” [1]
You’re right about Win95 (and Win98 and ME) not having true memory protection, but when comparing MacOS and Windows back then MacOS’ lack of memory protection was always mentioned.
