As a recently departed (read 5 months) ex-PM at Microsoft, I think MS's problems, at least in my division, stem from three things: a lack of vision/leadership, too inward of a focus, and the ridiculous bevy of meaningless communication. I think the article touches on each of these in a certain way, but not exactly in the same way I mean them.
One thing I noticed about the middle management at MS was that they never defined a direction. No one ever set out a vision. The result of this was that each little section of a product would decide what the best possible direction for the product would be and build features to that vision. The summation of this effort is a frankenstein product with a user experience that is equally as scary. No one worked together unless they were forced to and even when they did, they never really worked toward a common goal. Based on my experience, I believe that a single charasmatic, intelligent, and visionary person could have easily turned our division around. All it would take is strong leadership and a crystal clear vision. We had neither.
The article makes a point of MS being focused too much on itself, and I wholeheartedly agree. One of the things I was praised for was knowing what the rest of the tech world was doing (I worked on VS). What astounded me was how little others knew about non-MS technologies. We were beaten to the punch by other products nearly every time because we only ever focused inward and not on what the world itself was doing. Moreover, when people did look out the window they focused on the wrong things and instead of trying to innovate saw it as a need to start chasing tail lights.
Lastly, I got several hundred emails a day as a PM. Despite that deluge of written communication, I felt that no one was really ever saying anything of value. Sadly, most people aren't great communicators and the result of a culture that promotes a ton of communication is a torrent of useless discussions that take away from what really matters. It seemed to me that most managers were there solely to deal with the fact that no one was working together or communicating properly. I would argue that at least 1/3 of a person's workload at MS is the direct result of this inability to communicate and it absolutely destroyed many of the efforts I would've liked to have seen succeed.
I don't believe replacing Ballmer is some magic bullet. I think the company needs to be 1/10 of the size to reduce communication and to get people working together. I think it needs someone with a vision for the way things should be that isn't based on what's already out there. And I think Microsoft has a chance if it could only take a step back and see that it's no longer an innovative company, but instead a peddler of last year's model.