Hmmm... now I'm thinking of Lindows. Why didn't that make a difference?
Now you're hitting on it: it's because the cards were stacked to begin with. Reveal Microsoft's secret file formats, APIs, and network protocols, and release the OEM stranglehold for preinstalls, and you might see some competition in the OS market.

P.S. It's the same reason BeOS didn't make a difference. No install base, and no way to achieve one.