That's definitely an interesting point. Had Microsoft continued to add features to IE during that time they likely would have created a bunch of new "standards" purely because of their market share.
There would not have been an incubation period where new ideas and standards could be worked out. Had Microsoft just pushed forward I suspect we would have a lot of "web standards" that wouldn't have much purpose beyond furthering Microsoft's monopoly. I'm not suggesting that Microsoft took this time off purposely to incubate new ideas, but it could be looked at as a beneficial side effect.
In a bizarre way, MS is continuing to create standards: when you're a developer, you have to have all the IE bug fixes in your back pocket and know which bugs are IE's bugs and which ones are yours. How much time do you think is spent circumventing IE's shortcomings? It's strange to think that there's a whole slew of sites that get tons of traffic based on IE's flaws.
There would not have been an incubation period where new ideas and standards could be worked out. Had Microsoft just pushed forward I suspect we would have a lot of "web standards" that wouldn't have much purpose beyond furthering Microsoft's monopoly. I'm not suggesting that Microsoft took this time off purposely to incubate new ideas, but it could be looked at as a beneficial side effect.