I agree while Windows Starter Edition was a massive fail Office 365 is very profitable for them and it works for users like me where I can spend £75 (at time of writing) and get everything I want from office for a year for 5 PC's or I can spend £650 (£130 * 5) for one I can keep and then upgrade next year to office 2015.
Even if its every 3 years I still save money. the only chance I have to loose money is if there's no office for 8 years!
If they can get something similar for windows I'd be interested.
The main problem with Windows Starter Edition was when you wanted to upgrade you had to reinstall since the in place upgrade\update virtually never works.