The Zune was launched in 2006 and discontinued in 2012. Why did that product last 6 years?

I’m not saying Office for iPad is pointless (I use it regularly, so quite the opposite!), but I do think it’s foolish to think an organisation the size of Microsoft’s doesn’t necessarily do things for obvious reasons. Individual incentives do not always lend themselves to data driven objectives.

Apple created the iPod in nine months by cobbling together third party components. The Zune wasn’t exactly a billion dollar investment.

I think it's unlikely that Office for iPad is a billion dollar investment either. It doesn't change that it might not actually generate any direct returns for them.

Loss-making strategies can ultimately be profitable in a broader sense (if it increases the stickiness of the product on it's primary platforms, keeping away competitors, a strategic moat).

I don't think there's any evidence either way to be able to make any assumptions about the level of interest of the product, and whether or not that justifies it's existence.