There are things Microsoft has done that I don't think were right, but bundling software with the OS isn't one of them.You're right, because bundling isn't the problem. Product _tying_ is the problem.
It is much different to say:
"We are giving you product X with the purchase of product Y, whether you want it or not"
than to say:
"We are giving you product X with the purchase of product Y, and not only can you not remove product Y from your machine (as it is an integral part of the operating system), but we have taken special precautions to make sure that only product Y has access to features of product X that make it particularly useful; and by the way, your system provider signed a contract stating that they would not install product Z on this machine, so you're on your own if you want to install it. And don't complain to us if it is mysteriously disabled every now and then."
Linux distributions don't even compare. Yes, Mozilla is bundled, but if I want to get rid of it and use something else, it's nothing more than a dpkg --purge.
Bundling is not illegal. Product tying is legal too, except that it is a common technique by which a monopoly position is frequently abused, so it is something that frequently comes up in these cases when you are trying a company for abusing a monopoly position.