True but there were competitors to Microsoft (such as Linux and Apple), and there was no evidence of an upward march in prices. The free software revolution was gaining steam rapidly.
I've been in the software business for 40 years, and the free market free-for-all in software has been legendary. Pricing has trended to $0 for lots (most?) of products, and yet innovation continues at a furious pace.
The only really bad part has been the execrable patent wars.
In the 90s, aside from some niche use (artists and home) the Mac was done. I finally switched with Win 95. The only software that was (as far as I could tell) completely compatible between Apple and Win was Mathematica. By that I mean that if I wanted to collaborate electronically (with non-technical folks) I pretty much needed a Win system. So I got one.
And while I'm a huge fan of free s/w I still have to use office to collaborate with people who don't have strong tech skills and perhsps aren't too clever. Ever try to co-write a presentation or doc with someone using Win Office when you are using Libre Office? They just can't seem to keep themselves from formatting and it screws everything up.
So some prices have trended to zero, but there is a large discontinuity in the product set. Office 2003 has all the features I need, and I suspect that's true for most of us. So we are being coerced to upgrade by different means- the latest push is to rent the software so it can be continuously updatable. For all these things I don't need. And we are stuck in a tragedy of the commons situation: If I refuse to play along, I can't collaborate.
There was no technological challenge to this. Google wasn't around. VCs at meetups talking to young entrepreneurs would explicitly say they wouldn't fund anybody competing with Microsoft.
Think what would have happened if IE contained adblockers: Google would have been killed at the outset.
With no competition an important downward pressure on price is taken away (and an important upward pressure on innovation would be, too).