Considering that Microsoft was a completely different beast in that time, I'm not surprised it does not seem that silly. M$ (appropriate name for that time) of the day was doing its best to own everything and the did not let up on trying to hold back the open source internet technologies until the early 2010's I believe. Its my opinion that they were successful in killing Java Applets, which were never able to improv…
No, Java applets failed because they became the poster child for "Java is slow" take. Even though it wasn't exactly true in general, it was certainly true of applets, what with waiting for them to download and then waiting for the JVM to spin up.
What killed them was 1) HTML/JS itself getting better at dynamic stuff that previously required something like applets, and 2) Flash taking over the remaining niche for which HTML wasn't good enough.