Le sigh... I wish people would take at least a few seconds to think these things through before posting.
First off, Windows 8.0 is still receiving security updates and will for several more years. Vista still has about a year and a half before it's done. The update you're talking about, which wasn't very well covered by the tech press, applies only to Windows 8.1 users. Part of the problem is that the tech "press" today consists largely of new "blogs" where it's all about being the first one with a story, regardless of the facts. Being first means more people coming to your site, more ad revenue, etc. Most of the rest is made up of places that will just put up a company press release, add maybe 1-2 introductory sentences, and call it a story. In this particular case, however, some blame does have to rest with MS for it's awkward named 8.1 Update 1 patch. Still, it's hardly the first time MS has done something like this. It happens all the time that this or that patch has a dependency requiring some other patch be installed. I'm not really sure why it is this one was suddenly so special, except for saying what's old is new again. All the tweens and 20-somethings who don't know anything about what computers were like before about circa 2005, are suddenly "discovering" all these things that have been going on for decades and never seemed to bother anyone overly much.
Second, under the general principles of capitalism and the free market, isn't Microsoft perfectly entitled to make these decisions about their own products? I'm not saying it's morally right or wrong, just that under the general principles of most of the western world, they're well within their legal rights.
I'd be willing to give you a lot more credit for the asinine decision not to release an ISO of 8.1 to the general public if you weren't hamming it up so much.
But I don't think you seem to quite understand how capitalism works. If Microsoft isn't allowed to recoup their development costs at the expense of customers (i.e. people buying their software) then how exactly do you propose that Microsoft recoups its development expenditures? Hire a bunch of imaginary people with make-believe ladders to continually collect money off the fictional money tree? From the standpoint of a company like Microsoft, it's irresistible force meets immovable object. If they don't keep putting out new versions of their software, people will eventually stop buying copies of the old stuff, the revenue stream dries up, they go out of business. Or a competitor comes in and takes advantage of Microsoft's inattention to the market (see Firefox and Android) and starts eating their lunch, revenue dries up, they go out of business. Of course there's always the risk that people won't like the changes you've made because humans are nothing if contradictory. We crave variety, but hate change. The only consistent complaint you ever see about Windows 8 is the tile interface. Sure, it's odd and a little annoying, but so what?
I'm going to go out on a limb and assume you've never written a single line of programming code in your life. It might just be that you have the whole armchair quarterback/Captain Hindsight vibe going with your post, but developing software is not as easy as it seems. It's a lot of painstaking work and by the time you get to a couple hundred lines of code it's pretty easy for different parts of your code to start interacting with one another in ways you didn't anticipate. That's just with a single developer who wrote all the code. When you start adding in multiple developers, all working on different parts of the overall program, it gets to be all the more likely. It doesn't matter how thoroughly each developer tests his/her own code, when you put them together you get more than the sum of their parts.
I'm all for Microsoft completely scrapping the entire Windows code base and starting fresh like they wanted to do with Vista, but had to cut things a bit short because of how massive an undertaking it became. Take the decades of experience that has built up about how not to do this and methods that have proven effective for handling that kind of problem and roll it all up into a new product. Drop all backwards compatibility, which is where most of the problems are coming from, start fresh with a brand new binary format and API. You'd likely see a Windows that is everything people say they want: Fast, secure, easy on resources, you name it. Of course very few people would actually buy it, because as much as people like you love to complain, when it comes time to actually put your money where your mouth is, your convictions don't match up with your bluster.