How the fuck could they throw away everything? Microsoft is one of only FOUR remaining AAA companies on Earth, Sony was near bankruptcy and MS seems to have totally decided to not show up.
MS is trying to take on Google, Apple, Sony, Netflix and tons of other companies with Xbox One. They've invested in cloud computing, Xbox Studios, Kinect, etc. Their scope is fucking massive. Their hardware has to account for all these goals and ideas. Sometimes things can get out of your control and lose their way a bit in the process.