That was l33t, Nerseus.
My observation is that Microsoft's entire business model has changed. You basically have 3 levels of users for VS:
1. Basic user with no specific needs. They'd be just as happy with VS as they would with Borland, sharp develop, or Java for that matter. They would be most likely to take the least expensive or easiest solution. These folks program mostly as individuals. Schools would fall into this category. This is about traction, market hold, and education. This is a very fickle crowd. Product: Express Editions.
2. Small - medium project and Professional grade. These are the small businesses, or small/medium projects that have some quality needs but are still relatively flexible. A small business would be likely to shell out $300 - $1000 a license with little consideration but would still entertain the ideas of group 1. These guys have specific needs and those needs must be met for their solution. You'll usually see a mix of open source and VS development environments with this group -- plus they've already made up their mind to either buy or not buy. Microsoft wants this group but buyers from this group are gravy. Product: Standard and Professional Editions.
3. Medium-Large projects and Enterprise grade. This is where the money is to be made. These are the folks who will be buying large quantities of licenses and have very specific needs. These are going to the big time software makers whose biggest costs are things like communication and management and not development tools. These guys have probably also made up their mind already but still need convincing to buy Microsoft. Target Products: The whole enterprise enchilada.
The bottom line: Say you could either give away 100,000 copies of VS Express or sell 50,000 copies at $50. Today's express users are tomorrows Professional users and next week's enterprise users. When you are going to be making $100,000 on a single set of licenses for an Enterprise set up, express is really small peanuts -- plus the express market is really hard to sell to. So, the more Express users you can create, the more Enterprise users you'll end up with. Heck, Why are they giving away VS Pro at these Launch Events? Because you can make more money with less effort by selling Enterprise rigs - The launch events are all about educating consumers about VS Enterprise!
Three basic strategies:
Group 1. Give free to people who are hard to sell to in order to gain traction and users. Hard Sell.
Group 2. Don't worry about becuase they'll buy anyway. Easy Sell.
Group 3. Concentrate on marketing and really selling to these people becuase this is the group that will spend the most money. Hard Sell.
It all makes perfect sense -- it just isn't economical to sell VS Express right now.