This would be really sad mostly in terms of the fact that Microsoft running anything will immediately wreck it and make it wane into obsolescence. In my opinion this would be a tremendous loss in this case.
In my opinion this is the best outcome. The technology is not ready, and it's potential for abuse is far greater than it's potential for good at present. It needs another 10 years minimum to ensure it can at least be controlled to some extent. Breaking these models is trivially easy at the moment.
Microsoft won't put it on ice, but maybe they'll fuck it up badly enough that people will forget about it for a while. We're currently at the "VR in the 80's" point in the journey, imo.