More specifically, it came at a time where they had to be very careful what they did because they had the DOJ peering down their neck.

Windows didn't ship with a competent PDF reader for over a decade and some because of the DOJ: Any attempt by Microsoft to enter a market that already had a competition was seen as anticompetitive.

It's pretty trivial to get ValidationOS running, even down to RL1 where the kernel and NT execution environment are the only things you have: https://youtu.be/Zw5ysOJcY84?t=610