Steve came back to Apple when The Amelio Administration bought NeXT. The Bored of Directors then ousted Ameilio as CEO and brought Steve in as interim-CEO. Steve knew Apple needed help badly, so he trimmed the product line down dramatically and looked anywhere he could to get the financial help he needed to get the company back on its feet. For $150 million dollars in non-voting stocks Microsoft bought a bit of Apple and ensured that Internet Explorer would be the default web browser on all Macs for X number of years (i forget when).
The apple fell, hit Newton in the head, and it all kind of went from there.
I think that was what MS was worried about, since MS needed Apple alive for their court case.
Apple could basically have done the same thing recently to save the PPC platform, give Amiga a leg up with the G5 and help them with their new machine. Which would likely have been enough computer sales to save PPC as a viable computing platform.
But they weren't under pressure to keep the PPC or Amiga alive, so killing a competitor by ignoring them wasn't potentially lethal.