Developing a new shell for Windows was technically possible, but must have seemed like an outlandish prospect to companies like Compaq or Dell. ("Where are we going to hire a bunch of C developers who know GUIs and can do a better job at this than Microsoft? Forget about it.")
Some companies did go there -- for instance, HP had an advanced Windows shell called NewWave [0], but I don't think they ever built PCs specifically for it.
Today, the situation is very different. The executives at any old phone maker will look at Android and say: "That's just Java, isn't it? We have plenty of people who know Java. Hell, there's a school down the road where they train 100 Java developers every year. Let's do it! We can be a software company too, just like Apple!"
And of course we know how that turns out. But it will take a long time until the executives at all those LGs and HTCs will recognize that their organization sucks at software, because it's not a software organization at its core. (Nokia spent tens of billions of dollars on Symbian and MeeGo until they finally got this lesson, and they ended up selling the phones to a software company.)
It's one thing to swap out PROGMAN.EXE, as HP did with NewWave. But you're not allowed to interfere with the ability to run Windows Update.
Microsoft's entire business model has always been OEM prebundling, in which updates happened by buying a new computer. That is why many companies are STILL on Windows XP.
Anything else is bullshit coming from young people that haven't felt how the industry evolved during the nineties. And Android is very unlike Windows because Android is open source, Android can be ported by third-parties and Android can be forked.
For those interested in having the latest version (most consumers aren't even aware their device is outdated, or don't care) there's CM and similar options. Driver issues exist with some hardware (Samsung Exynos for instance, prime example), and that's a shame, but it's not much different from going to GNU/Linux on x86, which I find is comparable (more up to date, generally better performance and UX, non-proprietary, but some hardware incompatibility)
References:
http://www.theregister.co.uk/1999/11/11/no_surrender_gates_d...
http://www.theregister.co.uk/1999/06/22/phoenix_readies_plan...
That ended after the antitrust case. As part of the settlement, Microsoft was required to allow OEMs to preload anything they wanted on PCs. It doesn't matter if it's bloatware or a new shell -- Microsoft can't say no to any of it.
For example, Lenovo is now preloading Pokki on many of its Windows 8 PCs.
While the antitrust settlement was binding only on Microsoft, other OS vendors will now look at the Microsoft example to see what restrictions they're allowed to get away with.
When this happened to Microsoft, certain strategy-oriented parts of the company were happy to see Windows spread everywhere as quickly as possible and deal with piracy later, whereas others were more concerned with the bottom line and how to extract revenue immediately. Google will have to deal with the same political questions.
It's funny how Android even has its own versions of OS/2 in the form of BlackBerry 10 and Jolla's Sailfish -- that is, competing operating systems that proclaim to be technically more advanced while offering reasonable app-level compatibility with the dominant system. (I suspect that BB10 and Sailfish will share OS/2's fate in a few years. Too little user benefit against the high cost of lacking access to the dominant vendor's services.)