Interoperability and standards are the bread and butter of competition in technology. Every company tries to become "the standard". This is how they compete! There is nothing wrong with changing "business standards". Every other company does the same thing. The name of the game is "embrace and extend" - embrace your competitor's standard and extend it, then become that "standard".
If Kodak wants to succeed with their standard, they need to continually improve it, add the features that Microsoft added, and so on.
I don't know what you mean by "re-engineering" their product, unless you mean reverse engineering. In any case it's the same thing that AMD and many other companies do.
As far as J++ goes.. Sun has foolishly tried to maintain total control over the Java language (their license agreement is truly odious), and has complained loudly about MS porting their GUI controls to Java. But all that's moot because J++ has failed in the marketplace. Sun has WON the Java fight.
The Java story shows that Sun CAN compete with Microsoft, however this victory may be short lived as they foolishly waste this gain.
With .NET and the CLR, Microsoft is making their framework language independent - so you can run C#, C++, Python, whatever, and have easy portability from the desktop to mobile devices, and enjoy most of the same benefits of "Java"-like features (garbage collection, hardware independence, etc.)
If Sun wants to win they need to generalise the Java VM to handle other languages, ease up their licensing arrangements to encourage adoption by other large companies (including MS).. and so on.
Microsoft wins the standards battles because they don't give away the store (as IBM did in the old days), but their licensing arrangements aren't as paranoid as Apple or Sun's. They strike the right balance for maximum competitve advantage, and everyone else complains that they stole their lunch.
Of COURSE they are trying to replace the PDF format. They will fail, unless they come up with something that is better, again this is competition. The PDF format is entrenched and Adobe is winning that battle. Adobe is also a master of standards competition. They are continually improving the standard, and they make the spec publically available on their website, if you care to read it. You can even legally implement your own PDF viewer and editor.
...MS bottling up your personal information in Passport and keeping it 'secure' (good luck). Or the fact that 'free' doesn't mean anything if it's not interoperable. The one thing that makes me happy is realizing that MS is painting themselves in a corner. While suckers like you are happy that MS can go through their hard drive and report to Hollywood whatever MP3s you have (I'm sure you've already loaded the service pack that authorizes this), some of us choose otherwise. I like my privacy. I like only ME knowing what's on MY drive (it's all legal, thank you.)
So here we get to the paranoia bits that MS-haters love to engage in. Well, MS couldn't give a rip (no pun intended) as to what MP3's you listen to. It is the RIAA and the record industry that is strong-arming them into placing copying restrictions into Windows Media Player. As the saying goes, piracy is "the killer app". However in the long term, there will have to be a solution to digital rights management.
As for passport, if MS isn't your cup of tea, trust another large corporation like Yahoo or, in the future, possibly your bank. There are a LOT of large corporations that are entrusted with keeping your information safe, and I don't see why I should trust any of them any more (or less) than Microsoft. I will say one thing though - I definitely don't get as much email spam from MS.
What if someone was doing this to you in your line of work? What if I was the one laughing at you because I thought MS was 'God's gift to America and you were a liberal loser?' .. I have a feeling you're more stockholder than someone who understands technology or economics.
If you are in the tech industry, and/or have worked for a company that has failed to compete with MS, then yes, that would suck. On the other hand, that is also something called competition.
I wouldn't laugh at anybody that has lost this game, but I will say that you can win in technology by understanding the standards game and how it's played. Most companies that try to compete with MS bite off more than they can chew.
Most companies don't have a frickin' clue when it comes to standards competition and they get left in the dust by the likes of MS or Adobe - and then they complain to the goverment that their loss was unfair.
(Disclaimer - For the record, I do not work at MS.) I am Kubrick - the greatest film director of all time. Thank you for reading.