Well "fucking it up" is one way of putting it. And it's true, if by "fucking it up" people mean moving towards being just another player rather than the dominant player in the market.
Sears was the Amazon of its heyday -- if not more so. It dominated a huge slice of the American retail economy, using the hot technology of the day: the mail order catalog. It spent decades in decine, powered by inertia and massive paid-for infrastructure -- hundreds of yellow brick stand-alone stores and distribution centers across the country built in the 1920s to 1950s. I remember the Sears of the early 70s. Dirty, unattactive stores full of (except for tools) shoddy, undesirable merchandise.
Sears went though a decline-driven break up, divesting itself of insurance, consumer credit, construction and other non-retail operations before selling the rump of the retail business to K-Mart in 2005. "Sears" today is essentially a re-branded K-Mart, and many spun-off pieces of the old Sears conglomerate survive and prosper as independent entities or with new owners in a related business. The problem wasn't with any of the individual pieces of the business, it was moving with the times while managing all the different *kinds* of pieces of the business.
Which is not to say that Microsoft is necessarily going the way of Sears, but there are some interesting parallels. Like Sears, MS exploited an unique market position to enter many other markets. Like Sears, MS has several highly successful cash cow operations that can sustain marginally successful side businesses. That's a blessing in the short term, but sometimes a curse in the long term. In the mobile space, MS wore Palm down with shear financial persistence, only to lose that hard won market to more agile and creative competitors.
MS may still regain its mobile position by funding that business from its cash cows, but it's not sure thing. Doing that across many business areas could translate into a lot of lost profit in the long term, depending on its future success in those areas.