Trend Micro gets it wrong on a few points. Windows Update is the updating service for Windows only. MSE is released through Microsoft Update - the service for applications and additional Microsoft software that didn't come on the CD/DVD with Windows - things like MS Office, SQL Server, Windows Live Essentials, etc. Not only do customers have to turn on Windows/Automatic Updates, but customers have to explicitly opt-into Microsoft Update for anything that's not part of Windows.
Trend Micro can't have it both ways. When MSE was originally released, nearly all AV vendors said MSE was inferior. Now that it will be automatically offered as an Optional update, suddenly it's not so bad after all. Anyway, it's not automatically offered to anyone, only to the customers who actually open their Windows/Microsoft Update console, find it and select it (i.e., they choose it).
Finally, MSFT was prohibited from offering additional features in Windows for anticompetitive reasons (email, newsgroup reader, IM, Movie Maker, Photo Gallery). Like MSE, these are now an optional update called Windows Live Essentials that customers have to explicitly select from the Windows/Microsoft Update console to receive. Is it wrong for MSFT to use their distribution channel to offer an optional upgrade in the same way? Replace MSFT in the pervious sentence with the name of your favorite auto manufacturer and see how much sense it makes.