I am not presuming that people are idiots, please read my post again if you think so. I am just pointing out that
- not everybody is interested in computers all that much (and there is nothing wrong with that, there's lots of things I'm not interested in either), so giving the ability to create virtual machines or encryption is not very helpful for most people
- the features which the OP suggests should be part of the basic Windows installation are not, in their current form, all that useful to increase security. The virtual machine makes it so that the end-user now has to remember to update not only his computer, but also the virtual machines that it runs. Running the browser in a VM will do someone little good if the VM is compromised and he types his credit card number in the browser window which is inside of it. As for encryption, chances are higher that the end-user will suffer some data loss because of it than to avoid getting his computer compromised.
TLDR: Your post is mostly orthogonal to what I wrote. I said that VMs and encryption (in their current form, shipped with Windows) are not useful as security features for most people, and none of what you said answers that, sorry. And I didn't say people are idiots.