If Microsoft wants can make the best Media Player, Video Maker, Antivirus (MSE engine it's better than much others*), etc.
But Microsoft doesn't want to lose money, Microsoft fear Anti-Monopoly laws, etc.
MSE engine is based upon the Gaint Anti spyware engine which they purchased some years ago, then redeveloped it under the code name Morro.
From this project Windows Live Care, And Windows Forefront where born, next to Windows Defender.
The idea was to have Smartscreen, Windows Firewall and Defender + MSE work together to block malware however this project failed so massively that now years later only Smartscreen and Windows Firewall can be considered a success in terms of security.
MSE engine has always been rather good as Gaint the original developer of the engine did have a rock solid product, yet MS did screw it up in a very bad way. So NO you are wrong the MSE engine is a joke.
In regards to MS making everything the best i can say that NO they cannot make everything the best, for the plain and simple reason that their OS does not allow it configuration and stability wise.
One of the many reasons why Windows releases so many new versions in a rather rapid succession is because they are searching a way to bring all these tools into one OS without sacrificing speed, stability and so on... yet they fail time after time, and Windows Vista and Windows 8 are both a prime example.
Third party programs do not have to deal with limitations that MS does have to deal with developer wise, not to mention the many many bugs and exploits that are available to hammer down Windows.
In regards to MS losing money and Anti-Monopoly laws the simple truth is that there was a time when MS was producing first class software, so people did have to use their stuff as there was nothing out there that did come close to what they did offer, today these things are very different as MS is still the number one market wise, but when it comes to additional software they are falling behind.
MS does have nothing to fear other then their own demons they created many years ago, and while some lessons have been learned Windows 8 did proof beyond the reasonable doubt that some Demons still are around and noone is to blame for it other then MS itself.
This applies for most of their products. Some years ago people did accept more from MS as they did not have alternative options.
So they where forced to go with whatever MS did come up with.
Today there are MANY alternative options to windows additional software and 90% is better then anything MS has come up with yet.
Look at the browser market, the only reason IE scores high is due to the fact people cannot remove it and cannot turn it off, so it shows as being used as website logging tools will read the computer info and detect IE as being installed prior to any other browser that might be active, yet people do not use it and use FF, Chrome or Opera instead.
Windows Media player is the same thing, people use other alternatives yet they are still bound to the OS sound engine and codex provided by WMP engine... so again in the statistics is shown WMP while users might use something else.
MSE again is one of the most used AV programs, not because people actually use it but its because in most versions it comes pre packed and keeps running on the background while doing nothing good to your PC.
Windows Fw, and many other Windows addons are exactly the same way.
As i said before the reality is different, here search MT or make a topic and ask the people how many actually do use IE then you will see that if you have to believe the MS statistics then at least 7 our of 10 should use it day by day.
But i tell you that for the sake of argument when MT has lets say 500 members you would be hard pressed to find 50 that actually use IE as their main browser.
See my point?
Anyway if you do not mind shall we go back to the main topic?