Analysis: Wherefore art thou so buggy, MSIE?
Reasons pour le bouggienesse from reading the entrails:
1. Business model: establish monopoly via proprietary software in order to lock in and coerce customers to continue using MS software.
2. Corporate culture: internally, MS has no dedication to standards of any sort so no matter what their stated intentions. Even if the intentions are genuine at the smoke and mirrors level (i.e. Ballmer, spin doctors, etc), the working level grunts don't pay much attention.
3. Lack of expertise and experience: too much turnover in the grunts writing the code. Why? I don't know. Perhaps someone who's worked at MS can tell us. Some might call this "sheer incompetence". Perhaps the main reason is that IE 7 was left more or less untouched for so long that most of the programmers who understood it have long since moved on to greener pastures so IE code is written by greenhorn rookies with little experience.
4. Reuse of old code with old bugs unfixed: IE's original base was the long-gone Mosaic. I'll bet a jelly donut that the guts of IE8 still includes some of that code. Cue the fairly recently discovered bug in WMF rendering, a bug that turned out to have existed from Windows 3.1 on, iirc. It's quite clear that MS hangs on to elderly, bug ridden code.
5. Enforcing the MS monopoly: Andrew Carnegie, the great Scottish-American steel magnate, had the nasty practice of driving his competitors out of business by selling steel railway rails below his cost of production. Since his enterprise was large and extensive, he could target one hapless bastard after another for destruction simply by dicking them over in their more localized market.
In a way, the various types of software comprising a modern desktop computer (OS, wp, spreadsheet, db, media player, web browser, email client, etc) are analogous to these local markets. MS uses the profits from Windows and Office to subsidize IE in the same way, though bundling IE with Windows is a tactic Andrew Canegie had no equivalent to.
I should add that American anti-trust law specifically forbids Carnegie-like price undercutting…except in software!
6. Failing to charge a reasonable price for IE: The MS beancounters undoubtedly view IE as nothing but a cost center, since the profits from it are diffused across that vague entity "monopoly". Hence, IE development is chronically strapped for money, to the point that software quality suffers. If MS started charging realistic prices for Outlook Express, IE, and various other "free" parts of the Windows package, the quality of IE would go up—unless, of course, there was a mass flight to other browsers, cutting off the income stream.
It appears to me that in the face of this kind of institutional inertia on the part of MS, the only way to break the logjam would be for some major web destination to announce it's going to begin adhering to standards strictly.
Suppose Ebay, Amazon, Yahoo, MySpace, Facebook, YouTube, or Google did this, and emblazoned their pages with "works okay in standards compliant browsers, here's Ballmer's phone number to register your complaints".
If that happened, you'd see a sudden upturn in use of non-MS browsers. I speculate that if this happened, MS would be so far behind the 8-ball they would be unable to upgrade IE before its market share collapsed. But this isn't going to happen unless there's some kind of plot to torpedo MS amidships.
This explanation is so wordy only an extraterrestrial could love it.