I'm not too sure about that. Research suggests that you are worth around $150-$200 to Google in terms of revenue, where you aren't really forced to watch ads
If Microsoft made watching commercials a part of using your device, the revenue would be higher.
Not to mention, the subscription model. Office 365 is around $10 a month per user these days.
A Rasp Pi 400 is $179 + monitor (or existing TV). A regular rasp pi is under $50
Amortized over a 2 or 3 year subscription model, they would easily pay for itself in short order.
Since it would be a web-based platform, it's unlikely that any significant power would be needed. I'd suspect the base specs would match what Windows 365 would need, and you would likely boot in to a networked instance of Windows, where the heavy lifting is done cloud side.