They probably would rather that ALL users everywhere have access to `Windows` as a kind of service that they can access through standard web browsers or whatever.
Well that really is Microsofts biggest challenge. Finding new ways to expand (thus increasing the value of the stock) when they already have a defacto monopoly, and their existing products are already "good enough" for most peoples needs. This would be one way to expand their markets, although I don't think a web browser is the most ideal platform for something like this. It'll probably be .Net or Silverlight, if one has to go by existing Microsoft technology.
Secondly I think they are aiming to try to `take over the internet`
There is no way you can take over the Internet. This is the same point all those net neutrality people seem to be missing. The Internet is only the Internet because of net neutrality, once a single entity "owns" the Internet, be it Microsoft, Google or the telcos, it will no longer be the Internet, but more reminiscent of older on-line services, like AOL, CompuServe, MSN etc. Eventually a new Internet will arise out of the ashes.
This is also why Midori is going to have a difficult time with their breakthrough. For starters there's the resistance to chance, which Microsoft may be able to overcome simply because they're a monopoly, although if Vista is anything to go by that might not be sufficient. Something like Midori would absolutely, positively have to be an open platform or fail.
Thirdly by having their o/s be a service over a network they can have 100% absolute control over what the user has access to.
Unfortunately there are two major flaws to this plan, the most obvious one being that the world lacks the IT infrastructure to support such a vast on-line network. You would need a network connection roughly the same speed as the CPU bus, which is not going to happen on a global scale any time soon. Secondly and more importantly, Windows is the dominant platform because of videogames. No games, no Windows. Getting any games at all to work reliably on a platform like Midori, much less the more demanding games, is going to be a next to impossible challenge, never mind the massive computer that you're going to need to run some 10 million instances of World of Warcraft.
Fourthly I'm sure it hasn't escaped their notice that by being internet based and being able to control anything means they can now offer subscription services and pay-per-hour access to not only Windows but also applications within it.
Sure. They could. But the one thing Windows has going for it is piracy. If they make a subscription based service, with impossible to pirate applications, how many people are going to think the price they're asking is going to be worth the value they're getting? Does anyone actually think Microsoft Office is 400 USD better than Open Office, or do they just not care, because their company is paying for it through their bulk licensing agreement, because they can write it off on their taxes, or alternatively because they stole it.