The code base has now been recycled 5 times over, and
they keep adding layers to it instead of cleaning it up.
There have been lots of stupid extensions - technologies in the space we call COM - but they don't reflect on the core. And with the core - they've cleaned it up multiple times. Microsoft have been excellent at doing incremental releases with the exception of Vista. Everything else (including Windows 95) has just been a steady increment on the previous version. Dot net is an attempt to create a clean new alternative stack to allow them to stablise the legacy system so they can get it stable and then just leave it.
With NT3 they did as little as possible by taking lots of inspiration from OS2 but fixing up the things it got wrong such as single input queue. What were the major features improvements of Windows 2000 over NT4? Some steady interface improvements that were already available for NT4 as a patch, plus you could change IP addresses without rebooting. XP over 2000? More annoying user interface, support for some new hardware.
Also, you say 'recycled'? It has and respects legacy, and I agree that this holds it back - there are certain things about the core that are awful and hard-wired that way for the rest of time. One of the major reasons I avoid it for anything more than running browsers and office is that I can't stand the command-line limitations. But code doesn't get worn out through reuse. The major criticism I'd have of Vista is that they were so carried away by the prospect of duplicating the ridiculous operating environment that I hate about my OSX environment that they didn't recycle enough!
(One thing I admire about Apple. When the OS code got old
and crufty, they weren't afraid to start at the beginning
and do it right.)
They didn't though. They just rolled NeXT forward and wrote compatibility layers for the Apple stuff. I can't cite this exactly, but when he was launching NeXT, Jobs said something along the lines of "it's late, but there may just be enough time left to establish one more workstation platform". And really they cheated because it's just unix with their own GUI.