Windows wasn't ever free (until very recently, and even that isn't exactly the whole story). A big reason for the sheer quantity of bloatware on Windows PCs even nowadays is because that bloatware subsidizes the cost of Windows.
I know (and agree with) what you're getting at (that inexpensive commodity products dominate more easily than expensive niche products in a given industry), but comparing Windows and Android isn't exactly a perfect analogy.
Legally it wasn't free. But illegally it always was, at least it was as good as free.
In fact Microsoft itself wanted people to do it. Because if students and ordinary people pirate their OS, they will be trained to use it in everyday life. Later on, they would sell the OS to enterprises when the same people would eventually work there. That way they can always claim their OS was the most widely used OS in the industry.
Plus if they hadn't let people freely pirate their OS, Linux would have eaten their lunch big time.
Free as in legally free is what I meant; otherwise, we can argue all day that OS/2 and Solaris and OS X and IRIX were "always" free since it was (and indeed, still is) possible to pirate them.
You're also significantly overestimating the number of folks who actually installed Windows themselves, let alone who did so with a pirated version. Most Windows installations are OEM preinstallations, and Microsoft has been well aware of this (and actively encouraged this, albeit being dinged in the process for violating the Sherman Antitrust Act).
Windows wasn't ever free (until very recently, and even that isn't exactly the whole story). A big reason for the sheer quantity of bloatware on Windows PCs even nowadays is because that bloatware subsidizes the cost of Windows.
I know (and agree with) what you're getting at (that inexpensive commodity products dominate more easily than expensive niche products in a given industry), but comparing Windows and Android isn't exactly a perfect analogy.