I think Marc Hedlund hates Word more than I do, and he's figured out the general issue that I've only mentioned examples of:
Microsoft hires very smart engineers -- I would say the smartest in the business. When they see that some number of their users have some writing problem they believe a computer could be trained to solve, they do a better job than anyone at writing the code to solve that problem. They talk all the time about "knowledge workers" and their needs. What the Word team lacks, in my view, is an awareness that, when a user is trying to get his or her own work done, the user is always smarter than the technology. Assuming that smart people aren't their market is the surest way to produce a bad word processor, which is exactly what I think they've done.
MS' Word team has decided that they know what I want, and they are really, really wrong If I could buy Word for Windows 2.0 today, I'd happily give up all the "progress" in the newer versions.