Apple's App Store does not allow GPLv3 either, without digging though I can't remember if it is just GPLv3 or GPLv2 as well. They have to do it to protect themselves from lawsuit trolls, so Microsoft isnt doing anything wrong.

Listening to Glenn Beck make my brain hurt; it saddens me that people listen to him and believe him.

I'm not going to comment on the ethical arguments on this; you can really go either way with it. Far as legality; I am not a lawyer so no comment. In reality I don't care what they do, all I care about it getting the search results I want. I will do the same searches on Google, Bing and Yahoo (In that order) until I find what I need. Most times I get it with Google, however there have been times over the past few months that the collection of content farm results in Google's results is just to much and I move on to Bing or Yahoo.