I somewhat disagree that MS is as incompetent as you make them out to be (maybe with the exception of marketing and their reluctance to communicate a vision). Most of their problems are not a result of incompetence, but a result of their weak market position, which allows carriers and competitors to trample all over them. If you were an executive at MS you'd have fared no better, and we'd now all be calling you incompetent. I wouldn't agree with that either. The fact is consumer demand must come first, and until that happens, the economic and legal environment will stay unchanged. That's an obstacle MS can't overcome until a lot more consumers decide WP is worth giving a try.
As for everything else, yes, I hear ya. I think we just have different definitions of what a monstrous disruption is. IMHO not even the iPhone would qualify for that. Monstrous disruptions are those technologies/ideas which singlehandedly bring into existence a whole new market that did not exist before, like the introduction of the personal computer, the personal automobile, the radio, or the internet. I also agree that MS needs more than just few small innovations, assuming "small" means "non-disruptive". Disruptive means what I've been saying all along. Something that is unique to WP, which many find desirable enough to look past the app gap. That doesn't need to be a single thing, but at least a few things that in combination have the same affect on enough people.
The only way that can be considered impossible is due to a lack of imagination. I'm not saying this will happen, but in no way is it impossible. MS still has a few things they are uniquely positioned to latch on to, but so far haven't. Cloud gaming with XBOX tie-in, deep integration of WP within the enterprise, and the long expected integration between Windows, Xbox and WP are just some examples. That is all relatively low hanging fruit. In combination I'd consider those more than disruptive enough... and there is more...
As always, you have some good points. However, I still disagree especially on the premise that Microsoft is not incompetent. I don't think their poor marketing should be excluded as an example of their incompetence, after all that has been one of apple's biggest weapons and is a key skill to master in today's marketing driven world. Apple's marketing was able to help Mac sales with their PC vs Mac ads and of course when the iphone launched marketing played a key role in generating iphone sales even when it was technically less advanced and capable than competing platforms like BlackBerry, Windows Mobile and Palm. Why is it, with all the billions Microsoft makes they are incapable of marketing WP effectively? In fact the norm seems to be now that Microsoft adds a truly unique feature to WP but fails to market it but a competitor picks up the feature and is able to market it as if they invented it and get credit for it. If that's not incompetence, what is?
As to your point about WP's market position I'm not sure that hinders Microsoft in their in-house development efforts or how they market the product, in fact its their inability to effectively market WP that has lead to their poor marketshare. After all, if no one knows about the product, how will they buy it? And when people eventually get their hands on it and find it lacks expected features, who's to blame for that?
Looking at WP itself, back when it was launched it was so lacking in features it didn't have copy and paste. How could a company like Microsoft who has been in the software business for as long as they have launch such a barebones product, missing the exact same feature that its main competitor, the iphone was mocked for so long for missing and also considering the state of the two major platforms at that time? They launched a product that should at least have been competitive as they had the benefit of launching after the other 2 and could see what gaps needed to be filled from both platforms but instead they launched something that was behind even the crippled iphone on release. Ever since then WP has been playing catch-up and now seems to be forever stuck in the rear view mirrors of ios and android. 7.5 Mango, 7.8. 8.0, 8.1 all still lack functionality compared to ios and android. That's incompetent.
As for how big a disruption Microsoft would need to get people interested in WP, consider the marketshare and more importantly mindshare that ios and android have and you realize that it has to be something big to get peoples attention. Ask the average man on the street what platforms they know and they'll probably tell you the iphone and Samsung galaxy, and while those are not strictly platforms it shows how much mindshare apple and android have. How is Microsoft going to enter that conversation, that will have people notice them for more than 5 minutes and have the millions of ios, android and new smartphone users considering them as a legitimate smartphone choice? Remember they have to overcome the lack of apps, stupid carrier exclusivity, poor international bing services. I'm not sure anything less than a game changing innovation would be enough to counter all the things currently going against WP.
And I don't think Microsoft is capable of such creativity and focus. Its important to note that the current WP team has been in place since its launch so how can we expect them to suddenly reverse all the poor decisions that have been made to date and come out with something amazing? WP is a very good, fresh, unique operating system but who made the decision not to allow full resolution pictures to be sent by email? Who decided a business phone should omit the ability to directly attach business related documents like office files, even after they added file explorer access? Who said, don't let users set their IE homepage, or set a default media application, or not add smart dialing? These are all things that should be technically possible but for some reason it was decided not to add such needed functionality but instead add fluff like transparent tiles, and as long as the people who made these decisions are still the ones calling the shots then I don't see anything changing.