Tons of people predicted webTv-like systems, but predicting MS losing power was much less common.
As to the MS thing, I'm not sure that's all that accurate either. It's certainly striking that someone wrote this and presented it at a high level within Microsoft when they did. But it also isn't that far from the way the future of the web was framed outside of Microsoft. If anything, it's a reminder of the outsized role Microsoft used to play just in 'mindshare'. A great deal of discussion about the internet and the web revolved around how it might affect Microsoft, how it might be an opening for (or not) for Microsoft competitors and how Microsoft would respond. I don't think either Google or Apple today loom quite as large in people's perceptions.
WebTV wasn't the compelling product the author was concerned about. The open internet and more open hardware won then (to MS's benefit, for the author).
But the modern phone is that more compelling alternative.