That is revisionist history in the extreme.
The only revolutionist history I see here is your comment.
Every new OS does that to some extent. People are baffled by this new OS that screws with their muscle memory, renames stuff, adds new features that they are unsure of the reasoning behind, and takes away features that they liked.
By that metric, every version of Windows, of Linux, and the Mac OS thus far have been failures.
b) it caused many working Windows systems to no longer work,
Again, same with any OS. Is Snow Leopard a failure for losing people's data? I would say no, because success is a measure of the number of people who got it to work, not the number of people who didn't.
c) it created confusion without end.
This is basically analogeous to a), so my response there basically covers it.
You can even use this simple product metric - it was so bad that the company that made it decided to call the fixed version by a completely different name.
Wow, XP was so derided, rejected and shunned that they decided to call their next OS a completely different name, Vista! Wait...
You might want to disagree with me as a happy Vista user - but that makes my point. You might WANT for reality to have been that Vista was great and poor, poor Microsoft was unfairly slagged and misunderstood - but that is not Vista's history.
If you're willing to believe anything Apple puts in their ads, sure, Vista is a failure. However, in the real world, it is being used by between 20 and 25% of the world's computers - that's one-in-five to one-in-four. That's a staggering amount for any new OS to obtain witin three years.
Do you even remember Longhorn? How that failed to materialize? How Vista was supposed to be all of the Longhorn goodness that was supposed to be ready for prime-time release?
I remember Longhorn. Essentially, Longhorn died when they restarted from scratch in 2004 - the execs at Microsoft realised that there was no way they could complete it in any kind of time scale, so they scaled it back. And there's nothing wrong with that. Remember Copland, perchance?
Besides, we have most of the pillars of Longhorn today - we have Fundementals (Least Privilaged Control/UAC), Indigo (the new networking stack and collaberations API) and Avalon/WPF. We have most of the features WinFS would have provided in instant search and Libraries. The only thing I can think of that's missing is the flashy animations, the notifications history in the sidebar and the complete rewrite of core applications into .NET.
You do know that Vista wasn't just some follow-on to XP that didn't get a fair shake, yes? And if it was supposed to be the transition to anything, it would have been to the lauded claims of Longhorn?
Longhorn was originally supposed to be a point release. It even shows in the codename - it was named after the Longhorn Bar that sits between the Whistler and Blackcomb mountains, the idea being to get from Whistler (XP) to Blackcomb (the major release after Longhorn), you would have to go through Longhorn.
Soon after it's inception, however, it begain to accumulate features. More and more of the features slated for Blackcomb began to find their way into Longhorn, until PDC'03, when it had become a major release. The PDC demo was awesome, and externally, Microsoft was saying that nothing was wrong.
Internally, however, it was spiralling out of control. Similar to Copland, people were beginning to haphazardly put their own pet projects into the codebase. This fact, coupled with the fact that the best engineers at Microsoft were working on 2003 Server, is what drove Jim Allchin to write his famous "I'd get a Mac" memo - he'd decided that enough was enough, and enlisting the help of Brian Valentine (for his experience in shipping products) and Amitabh Srivastava (his career at Microsoft had been mainly testing and deploying quality control systems), reset development to the newer Windows 2003 Server codebase, enacting stricter rules on what could be put in the codebase.
If anything failed, it was Longhorn.
Anyway, Vista did turn into a transitionary OS of sorts - it introduced a new driver model, a new networking and audio stack, new developer technologies such as Avalon, and a better security model that forced developers to program for the least privilaged user. By the time Windows 7 came around, most devices supported by their manufacturers already had drivers availible (unliked Vista), and most programs supported by their developers now assumed least privilaged access (which is always a good thing).
No matter how successful, to say it didn't serve as a transition from old to new shows a grave misconception in history.