More Fun To Compute said:
I think that you are mistaking Microsoft for a rational individual that acts on one long term play. If you give people control of a relatively small and unsuccessful part of the business like xbox and tell them to make it work then they are going to take this sort of decision. They almost act like a competing company inside Microsoft, some even say that Microsoft should be split up because of this sort of thing.
You're quite right in that Microsoft is not functioning as a cohesive entity on this. However, overall they've sunk a great deal of investment to hammer the Xbox to "success" at pretty much any cost. It wasn't just their games division that could allow such heavy (and until very recently) unprofitable investment. So their actions were at least tacitly approved, if by mere fact of their being allowed to continue for years.
And stacked against the very real actions and investment of their Xbox division, all Microsoft has done to help PC gaming in recent years has been to promise to "revive" PC gaming time and again. The only material act they've taken is the universally hated Games for Windows Live platform (I am not judging GFWL personally, but we can at least agree that most gamers think it a blight at least, I think).
So stacked against their very real actions against PC gaming, we have some PR talk and a buggy, disliked games platform. So yes, you are likely right in that in the depths of Microsoft's massive corporate bureaucracy there is a desire to see PC gaming do better, and to their advantage of course. However, the extent of that desire, or the weight it carries within their corporate framework, obviously pales in comparison to the desires to keep it down to benefit the Xbox.