They lost because of performance. That is being addressed, and modern computers have quite a bit of performance to be able to handle them.
Face up to the facts. Andy was wrong, Linus was right.
Or, to paraphrase Mr. Spock, Microkernels are like a beautiful rose that smells ... bad.
I think OO is a fad that will eventually go away for similar reasons. It's silly to throw away performance for non-human readable code - you pretty much need an IDE for OO programming. FP FTW!
As far as the marketplace goes, sure. But Linux would be a lot more stable if it had used Andy's ideas. Slower, sure, but more stable. As we've seen with Microsoft, stability tends to be low on the list of desirables.