No, I think things are also worse but you have to understand there is a generation coming of age that never experienced paying for an operating system or really even paying any kind of substantial price for software of any kind. To them it would absolutely be worse to pay for software but not have it harvest your data. Most people aren't very cognizant of the data harvesting.

For a 1995 era vision, you can make a reasoned case for MSN. The competition was not necessarily the Open Internet, it was AOL/Prodigy/Compuserve.

The walled-garden platform did offer some benefits, particularly when you've got an audience new to the medium. This was an era before ubiquitous search, so the fact everything was in a single navigable heirarchy was more valuable. (Remember, this is also back when Yahoo was valuable as a directory.)

Since there was a single gatekeeper, you could promise a safer, more accountable and family-friendly environment for the social channels. Again, appealing to new users.

There may also have been potential for more exclusive content; if the walled-garden clients offered richer media (or the services better kickback) than what can be provided by a normal 1995 HTML tag-soup site running through an early IE or Netscape, it would be worth partnering with them.

I'm actually surprised that the walled gardens went down without a fight. They could have stayed around presenting themselves as a "premium over-the-top channel" style offering-- you can get the same basic internet as everyone else, but for just $5 more, all this extra. I can recall my parents were willing to pay $25/month for AOL when generic dialup was in the $10-15 range to remain part of specific communities inside the walled garden. AOL did an incredibly poor job pivoting as people moved to broadband-- I can recall there was a package to use their propriatery offerings with an external ISP, but it was expensive, until one day it was free because they realized they needed to keep their portal/email audience from imploding totally.