The problem is it has no real relationship to the Windows operating system that users relate to.
Actually, it does.
The Windows 8 "metro" UI is very similar to what the Windows phone uses (and that's the term they use, so it's why I used it.) And it gets a *lot* of flack on a desktop, and rightfully so -- as you said, it doesn't do windows (the ui feature) at all and each app is full screen. Which is great on a phone, but kind of silly when you've got a 23" monitor or two and all the app is doing is telling you the time.
But other than the Metro UI, Windows 8 is very like Windows 7, and indeed ... Windows 8 on a PC is likely acceptable for somebody familiar with Windows 7 if you install Classic Shell and never go into the Metro UI stuff.
Now, perhaps the government shouldn't have given Microsoft a trademark on that word, but that's not Microsoft's fault, and the PTO gives out lots of trademarks on generic words.
But if your biggest complaint about Windows 8 and the Windows phone OS is that Microsoft should have picked a better name ... that's high praise, indeed. Most others have much more significant complaints than the *name*.