So what? You had alternatives...
No realistic alternatives in a world where 95% of business/enterprise PCs were DOS/Windows-based and private PC ownership was just starting. If you had a Windows PC at home you could get most of the important software for 'free'! From the boss (who of course wasn't necessarily aware of it, or looked the other way). On floppy discs. Remember those? I do. Anyway, that was a huge incentive. Big cost savings.
Another huge incentive was that you could ask sysops at work for help. There were no helpdesks in those days. No Youtube How-To's. No forums.
Sysops knew DOS/Windows. And about dissecting and rebuilding hardware. Who better to ask for help in a world without internet or helpdesks? Who else?
Bottom line: users were dependent on what happened in the enterprise world. And that was 95% DOS/Windows.
So the great majority had no real alternatives if they wanted a PC at home.
Microsoft did not forbid you to install anything you wanted on Windows. Microsoft has never limited you to a specific store where you can buy/install stuff, and has never forbid you from changing your settings or modifying the system. They have never forbid you from installing windows on certain hardware.
True, Microsoft didn't lock in. Only out. Which was virtually suicidal with a 95% elephant in the same pen. Nearly choked Apple too. But they were kept afloat by the creative community. Graphical artists, advertising, audio studios, the printing industry, etc. And then, with OSX and iTunes/iPods, Apple added lock-in to the mix.
"Walled Garden" does not mean what you think it means.
I've watched it grow out of control from infancy.