Killing Windows Phone would mean throwing some 40-50 *million* users under the bus...assuming that in the following year another 15-20 million users don't sign on, which they likely will given how many OEMs are entering the market now with WP.
So cancelling it would be a horrible idea and might even impact the number of subscribers on their services. Remember, unlike iOS or Android, it's on Windows Phone where Microsoft services get front and center treatment. From the first moment you'll have to sign onto (or use) a Microsoft Account, and from there, your life orbits around Microsoft's service offerings.
Which leads to my second point, unlike Android, Windows Phone only had one serious OEM backing it in 2013-2014, i.e. Nokia. However much mass Nokia can drive on its own, it's still Nokia vs. Samsung, HTC, Sony, LG, Acer and a plethora of other OEMs, e.g. Micromax, Karbonn, Hi Sense, Xiaomi, etc. I don't know how many Windows Phones consumers could possibly pick up in the market if about 97% of the supply is pushed by Android, and that too at very low price points (it's only now that Microsoft's offering the WP OS for free).
Which leads to me my third point, would WP have done equally as bad if many OEMs decided to push it and if carriers, world wide, gave it as much of a serious shot as Android? You're in Pakistan so you're not entirely familiar with how much weight carriers have in places such as North America, they're often the make-or-break venues for platforms. What chance would WP even have if a carrier store can't even be bothered to have a working demo unit for users to play around with?
I think this is becoming a discussion about "let's kill Windows Phone for the sake of it" than the intrinsic qualities of the OS, and that's quite sickening to be honest. And no it's not sickening because Windows Phone might die, that'd just be disappointing, but it's sick because it illustrates just how plain stupid many people are getting. Why kill the 3rd (or 4th or 5th)? Why not push it even harder and drive more diversity and choice in the market?
Who says Windows Phone has to be killed? But for people to try it out Microsoft would again have to try to do something that will earn them a negative reputation, get Android apps because there is really no other way, developers don't really take this OS seriously.
And the more OEMs that join in, it's a double edged sword. What I mean is that before only a brand that was reputable "Nokia" was producing the majority of Windows Phones but now that you see more of them made by companies like Micromax(which has somewhat of a bad reputation in India) you'll start to see more fragmentation and Windows Phone won't be the same premium and optimized experience it used to be.
Yes Windows Phone is the third largest but I don't think it'll ever go beyond that, no one does. It might establish itself as a sold third place OS but it's very unlikely that it'll go further.
In Pakistan you are right we have very few companies offering phones on contracts, we have to get phones off-contract via local stores which is sometimes more expensive. But I've seen that Nokia does some decent advertising here and Lumias will often be the only devices display in shops for people to use, but has that made an impact in sales? Nope, people still walk out with their fancy new iPhone or HTC One, or Galaxy S5 and so on...
One of my cousins and me actually tried Windows Phone by purchasing a Lumia 520 in January, my cousin switched to a Note 3 just a few months later and I asked him why.
He replied by saying that the optimization of Windows Phone even on the low-end devices is amazing but the OS is not nearly as polished as it needs to be for me to cash out over $600 for it. He's actually right.
And Microsoft can only do so much, it's offered programs to encourage developers and even asked them, it just doesn't work.
Microsoft's only alternative is to go for Android apps, another thing that may kill Windows Phone.
So really the future of Windows Phone for Microsoft is really a "damned if you do, damned if you don't" situation.
I don't want it dead but it's not thriving either and eating up a lot of resources and time of Microsoft.
But I do agree with one of your points, Windows Phone is the starting point of where people begin to start using Microsoft's services. Having switched back to Android myself I still use Outlook and OneDrive, both of which have amazing apps on the Google Play Store, in fact the Outloook app is even better the Windows Phone version.
But if Microsoft's services are available on other OSes, what's the point of really going for Windows Phone? Especially when the services provided on Android and iOS are often better than the ones on Windows Phone.