This is not true. C# got functional features thanks to the work of Erik Meijer and his team.
His paper "Confessions of a used programming language salesman" about this work, is very well known in the compiler design community.
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.118....
Yeah, LINQ was what got enterprise developers slowly started into the FP world.
According to Don Syme's blog posts, certain "product team members" said that "generics is for academics only." However, he did not name Anders Hejlsberg as being one of them.
Here's the blog post: http://blogs.msdn.com/b/dsyme/archive/2011/03/15/10141602.as...
Also see: http://blogs.msdn.com/b/dsyme/archive/2012/07/05/more-c-net-...
Also see the story from the other side: http://blogs.msdn.com/b/scottwil/archive/2007/10/24/working-...
I wonder if MSR's implementation of generics in .NET 2.0 was why F# got bundled into Visual Studio as a first-class language. IronPython, IronRuby, etc. never got that type of internal buy-in and got spun-off instead.
I've no real clue why F# was productized, but I'd like to think it was because MS realized it has to stay competitive. F# is probably the most advanced language with that level of tooling, support, libraries, etc. I know F# is the only reason I continue to target the CLR. At the same time, MS's F# support certainly feels like it's just lip service, even while their flagship language lacks basics like a REPL. (I know, Roslyn will cure all.) I've yet to see any marketing suggesting F# would be a better choice for many projects; only esoteric sciencey and maths usages see suggested.
What'd really be forward would be for MS to support Rust or a project like that. (I believe they hired the guy behind BitC but I don't think it was for language design.)
To MS's credit, .NET did aim to be a true multi language runtime, back to Project 7. They got feedback from many people to make sure many languages could be accommodated (looks like they've since given up on this goal). Ironically, the JVM, with it's strictly less capable VM, boasts far more languages targeting it's runtime. Probably because Microsoft worked against releasing it for other platforms and is still a bit standoffish.