I agree with you: Microsoft is dead, long ago. However you fail to note that another famous victim of Google, Javascript and broadband is Apple itself. In fact desktop software in general is dead. Word processing, spreadsheets, e-mail, image editing, project management and many other traditional desktop killer-apps are now offered for free on the web. Let's face it: only professional graphic designers and architects really need the power of Adobe Creative Suite or Autodesk Autocad and, as a consequence, a Windows or Apple machine.
How people are coping with this new reality? There are, in my view, two different attitudes. People more sensitive to hype are buying expensive Apple laptops even when they are simply overkill for their real needs. Programmers buying Apple laptops just to run Textmate are similar to fashion victims buying the latest Gucci handbag. Other people are more rational and choose cheap but sound Linux boxes (especially the Ubuntu flavor).
I think 90% of computer users can live with Ubuntu without any problem. Of course the desktop software libraries for Linux are very meagre compared to Microsoft and Apple's universes but we've just stated that desktop software is dead: web apps' user experience is the same on every platform. The operating system really doesn't matter. Don't you have other needs to satisfie instead of buying an expensive and useless Apple fashion laptop? Buy a cheap laptop, install Linux and enjoy your life!
And what about the business side of the moon? What will happen when companies will suddenly discover they don't longer need desktop software? Companies are more cost-conscious and I assume they will migrate to Linux en masse.