Issue is, I don't think even the current competition is helping them to get better, if they became smaller for some reason they'd just go back to their active sabotage days.

What I'd think would help to actually wither Microsoft's monopoly in addition of breaking it up is forcing them to open source Windows, thus taking their main leverage on the market. Windows would be a good (not great) OS if it wasn't for MS and its shareholders trying to monetize it as much as possible, and trying to make all computers like what the Junkman had in the Superhero Team vs. Genocidal Purple Guy Part 3.