The state-of-the art Windows shell at the time was the MS-DOS Executive:

https://microsoft.fandom.com/wiki/MS-DOS_Executive

Alan's idea was that your desktop could be customized to your needs, either by yourself or by an IT group. Say you're rolling out machines to an accounting team: the Windows desktop would have tools right on it to make those team member's jobs easier.

Or you could make your own desktop tools with a few clicks and maybe a bit of scripting.

In the end, Microsoft decided to go with Program Manager and File Manager for the "shell" and turn Ruby into application development tool.

Apple: Develops something close to the perfect desktop UI on their first go.

Microsoft: "I know! We'll let users create their own UI! What could possibly go wrong?"

That Ruby ended up the way it did was an example of what they call "cooler heads prevailing".

Apple released something similar called HyperCard in 1987: https://en.wikipedia.org/wiki/HyperCard, allowing users to create their own UI.

HyperCard was not intended to enable users to change the shell UI. Ruby was, originally.

What's the fundamental difference? HyperCard apps had minimal chrome and were fully customizable.