The web is just a bunch of computers out there. They run perfectly normal operating systems. Browsers aren't that. But the point of an OS is to make the computer's resources available, and the browser did do that - it made available to users what the web servers provided.
The cloud is also just a bunch of computers out there. Those computers have normal operating systems. But that isn't what you mean. What makes those resources/services available to users? The "OS" is the interface that AWS or Azure or whoever provides.
End users would benefit if Microsoft had more incentive to stop making their core product worse.
Huge software projects are high risk, even if you try hard to learn the lessons from failed big software projects. I think this would be a better investment than Softbank spending $300 millon on a 45% share of a dog walking website.