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The stance would be that the hardware was capable of running competitive software, but MSFT used their 'monopoly' status to force me to continue to purchase their products, in an anti-competitive nature, for me to perform a set of functionality that 'could have' been unlimited.

OK, didn't think of that scenario. Please don't misunderstand, I think this is a terrible idea, I just didn't see any avenues by which this would lead to litigation. Another lawsuit possibility is when the stuff malfunctions and doesn't let you run the stuff you ARE supposed to be able to. MicroShaft is notoriosly bad at authorization-enforcement-software, witness the WGA fiasco.

Please don't misunderstand, I think this is a terrible idea, I just didn't see any avenues by which this would lead to litigation.

I do think that there may be a business case to do this. Say for example all I want out of life is for some PC to function as a server. Just host a bunch of web pages, maybe provide access or limited access depending upon 'rights' of various users - purchasing the full WinXP, Vista or Win7 would be overkill.

It all depends upon the wisdom of MSFT in picking and choosing - and this wisdom is not what one would expect from a company in a leadership position such as MSFT.