The modern paradigm of "application blasts out a rectangle of pixels" and "the desktop manager composes those into another rectangle of pixels and blasts them out to the screen".

It actually separates the OS from the GPU. Before WDDM your GFX device driver was the only software that could use GFX acceleration. After WDDM the GPU is another "processor" in your computer that can read and write to RAM and the application can use the GPU in user space any way it wants, and then the compositor can to the same (in user space) and in the end all the OS is managing communication with the GPU.

For that approach to work you need to have enough fill rate that you can redraw the screen several times per frame. Microsoft wanted to have enough they could afford some visual bling, but Intel didn't give to them.