During the Browser Wars, Microsoft was trying to protect its Windows franchise; at the time, they weren’t ready for the Internet, and the Browser-As-Platform threatened to marginalize Windows like nothing else could.
Microsoft won those wars, and things have changed a lot since then. Microsoft has been successful in getting new development to happen with .NET, a Win32 replacement for the networked generation. And .NET supports the Browser-As-Platform paradigm quite well. The dominance of Internet Explorer protected Win32 until its replacement was ready. Does Microsoft still need it to dominate?
Maybe they are happy to let Internet Explorer fade into the woodwork of Windows. After all, they haven’t kept up with innovations like tagged browsing, RSS support, and other nice things you find in the latest and greatest browsers. Plus, Microsoft put up no struggle on Mac OS X when Safari plowed right over IE (good riddance there). So would Microsoft care if Firefox kept gaining? I don’t think it weakens Windows to let it keep growing. In fact, it neatly solves a big problem Microsoft has: how to cope with browser vulnerabilities (and where to shift the blame when they do appear).
Do you think Microsoft will put up a fight against Firefox?