In all honesty, Microsoft would have probably made more money selling Vista Ultimate, and only ultimate, for $34. I would spend $34 to have a legal version as opposed to a pirated one. Vista sold 20 million units per month in the first quarter. Now I am going to make up statistics, if pirated copies equate to 5 times the legit copies (and it is probably more) then they would have made just over 4 billion dollars each month selling vista ultimate at $34 each if pirated copies were undesirable.
Vista made ~ 4 billion a month, which means they wouldn't have lost money, catered to a larger group, become more liked, and wouldn't worry about pirates or being defaced by pirate copying.