While your post makes some good comments, I think you're missing the mark on a couple of important points.
1) I'm glad to see you mention PWS in this version, although you still don't acknowledge that IIS is free with NT server. This means they're already competing with Apache when it comes to price. Since it ships installed, it gives IIS the slight advantage when it comes to atractiveness.
2) There are already features in IIS that only work with IE. Most notably, the NTLM authentication mechanisim that is missing from Netscape clients and Apache servers. This makes browing sites that require authentication, especially intranets, much more transparent to the user. This makes them more attractive.
3) MS is essentially saying "we will win the web server war based on features". This is no more evil than trying to build a better mousetrap. As one of the mice, I still want to get iron plating.
Our challenge is much as you describe:
- Show why open source and platform portability is a major feature
-- Match the MS features one-for-one
-- Improve our weakpoints as a server _and_ as a client