They can make it better than MS's offering because they are providing you with exactly what you need.
Take for example me, compsci student. I wanted to have a sub-600€ laptop with good hardware and good battery life, but did not care much about display. I ordered a thinkpad, replaced the HDD with an SSD, and am now happy with it.
The trick is called customization: Being better because they can deliver exactly what you need.
No, they really do have too many models. The yoga line is nice, but they clearly don't invest much individual resources on the design of each of the other models, which tends to make them generic. I have a work-supplied s540, and it's a decent workhorse laptop, but a macbook it is not. It's too generic for that. I was also pretty disappointed that the coating had blemishes. Even a cursory visual QA check would have detected those, so either they're shipping product sight unseen, or they're deliberately deciding to ship blemished goods.
Take for example me, compsci student. I wanted to have a sub-600€ laptop with good hardware and good battery life, but did not care much about display. I ordered a thinkpad, replaced the HDD with an SSD, and am now happy with it.
The trick is called customization: Being better because they can deliver exactly what you need.