Possible yes but I think its more likely that they want the .net framework to take off in a big way so they are offering free versions to get max coverage and encourage people to learn the .net programming languages.
There are many good open source apps out there yes I aggree but what do the majority of corporate users use Windows XP and Office.
I do think they are planning to try and dominate other ares of the market thou, with the windows live care thing, there expression graphics applications and the usual office / OS stuff plus programming apps.
I think they have realised they can no longer sit on there laurels anymore. The world has become alot more tech savvy and users demand alot more from there systems and value for money.