Well, I was there and during the first browser wars and I saw users and developers choosing IE because it was faster and had more features than Netscape. Thanks to Microsoft we got XMLHttpRequest (AJAX) and Web 2.0 (DHTML, iframes).
IE was just a better browser and that's how it gained market share - the same way Chrome did. The fact that IE was the default was secondary. If being the default was all that was needed, IE would have never lost any market share.
Having your competitor do all the work and then using it to your advantage sounds like a win to me though. Also as a user and a developer I consider it a win on multiple levels. I'm happy that every desirable target platform now has a default embeddable browser engine derived from a common high-quality WebKit heritage. I also now have a major non-Google fork of Chrome to choose from, one that I know will be there for the next decade.