The reason the music industry thrived under those circumstances was that copies were inexact and difficult to make.
That's only part of why they thrived, but yes. Copying was difficult and expensive so there was a fundamental need for their services, and they were able to make great profits by serving that need.
The march of technology however has changed that, just as it has changed so many other fields over time. Copying is no longer difficult or expensive, so there is no need for the record companies services in that fundamental sense. They could adapt by finding ways to fulfill genuine needs and desires of customers that they could still provide for, but they refuse to focus on that and instead keep trying to invoke the force of law backed by our tax money to FORCE us to continue paying for services we no longer need. That is fundamentally unjust.
If the binaries were not copyrighted, a business would buy one copy (not necessarily from Microsoft) and distribute it to everybody.
They could, sure, so like the record companies, Microsoft would need to find something to do that customers actually need instead of just relying on legally enforced rent payments. Other software companies do this all the time, why shouldnt they?
Keep in mind in accord with a couple other posts in this thread they would have the option to disclose and copyright the source code to office if they want to continue to claim copyright on the binaries. As long as they are genuine reproducible machine transforms of copyrighted source code they would still be covered, you just wouldnt be able to copyright a binary qua binary. So they could continue basically undisturbed if they are willing to publish the actual texts they are claiming copyright on. Only if they refuse to do that would it then become legal for third parties to copy and patch and provide support directly to customers for these binaries. It seems only fair.
Copyright law has its flaws, and has been taken to harmful extremes, but the base principle of spreading the author's costs and profits over everybody who wants a copy works pretty well in practice. In doing that, it does serve its Constitutional purpose in the US.
I disagree that this is the basic principle. The Constitution says nothing about spreading costs or profits let alone guaranteeing profits (which is what this has evolved into.) The idea behind copyright was a bargain between private interest and the public domain. Copyright was granted only after a work was published, and the idea was a temporary monopoly to the author was supposed to encourage the author to publicly publish work that might otherwise not be published or might be published only in-house and treated as a trade secret, so that it would actually be available to enter the public domain later.
The way it is being practiced today is a farce. Companies can play it both ways, treat works as trade secrets, refrain from publishing them, ensure they will NEVER enter public domain - yet they can still claim copyright on those works as well. This is no bargain between public and private interests - it is the utter sacrifice of public interests in return for nothing whatsoever.
When, let's say, Windows 3.1 legally enters the public domain (still many decades away because of legal changes) what exactly is going to become available? Opaque binaries that only ran on long-since forgotten hardware? Nothing of use to anyone by that time.
Without a human-readable publication there shouldnt be a copyright to enforce.