Forget about Netscape and Java. A trip to some local computer stores is all it takes to realize that Microsoft is gouging us. The fantasy version of retail theory says that publishers like Microsoft sell product at discount through distributors to dealers and then to you and me. Everyone along this food chain takes a piece of the profit, with the publisher setting a suggested retail price and the dealer setting the actual selling price. That's the fantasy.
Reality is completely different.
In the real world, dealers don't actually make money by selling software. They make money by selling shelf space to software publishers. MDF takes the risk out of selling software because the dealer gets paid whether the product sells or not. To keep this easy money coming, dealers typically sell software at no profit at all. Addiction to MDF puts the publishers in control of what dealers stock and sell.