Well, yeah, I overstated it a bit. But they're nowhere as confident in their ability to execute as they once were, and their recent forays into mobile products and cloud offerings haven't been stellar successes. Azure is credible but nothing like Amazon, etc. And the mobile side is dead -- Ballmer's famous laughter at the iPhone is pretty hollow these days.
They rested on their laurels, relying on their monopoly status, for long enough that their competition had time to grow from negligible to credible to substantial. MS still has the majority, but it's the trend that they are rightly worried about.
All your other points are valid, except the above. Yes, Ballmer was an idiot for laughing at the iPhone, MS' forays into Mobile have been horrible but the Surface is having big success in the Enterprise space. Three years ago our Senior Exec's all wanted iPads/iPad Pro's. Now? The want the latest Surface devices.
And about Azure: it contributes more to Microsoft's bottom line than any other line of business Microsoft has and they're growing as fast/faster than Amazon. Azure is the only real competition to AWS at this point.