We truly don't know how good we have it and how far we've come from the early days of operating systems. Most everyone has one idea or another of what an operating system is. There really isn't a universally accepted definition of what an operating system is. One definition, and the one I will be using in this article, is that an operating system is a control program used to manage user programs, prevent errors, protect resources, and resolve conflicts. We've seen how hardware has evolved and how much of an impact that has had on computing in general.
Software is a different story.
When we think of software evolution, we think mostly of how games and applications have evolved to become more user friendly, include more features, be more efficient, and generally have faster run times. This really isn't because the software has changed. The potential of software has always been there. The real limitation is hardware. Operating system designers usually are limited to what the hardware designers give them to work with.