Fair points. However, if it's generally accepted that making the browser an object of the OS is an expected evolutionary step, then what choice did MS have? What should MS have done in order for that to not be an abusive action of a monopoly?
Making the browser "an object of the OS" wasn't the issue. The issue was that they not only integrated the browser with Windows, they tied it to Windows; not only did they claim there was no technical way to remove it, but they also prevented OEMs from removing it through licensing. Of course, the technical claims were later shown to be utter hogwash through 98lite, which left them with only their licensing, which then was pretty clear that it was imposing an arbitrary restriction on the consumer or system integrator, designed specifically to tie one product with another.

It was clearly not just a case of product bundling, but illegal tying. Kompare that toe Konqueror and you'll see immediately the differences between the two scenarios.