They do, seriously! I wouldn't buy a Windows Mobile device of any kind to save my life. I only use Windows when absolutely necessary, and I much prefer Ubuntu when doing development work (although as long as I have access to the same tools, I can be productive in either environment). The rolling green pasture background really wears on me though. It makes me want to yak when I see it.
If you look at the culture within the company, the reasons for the quality of this software sucks. Go read what Joel Spolsky's written about software development. He worked on the Excel team at Microsoft and spent many years in the trenches and he's been ranting himself about them ever since.
Operating system design should focus on the users first and foremost. This is especially true of mobile devices. Its bad enough trying to type up text messages on a standard 12-button keypad, then to bury the options that you want deep in the menu system can cause a lot of frustration. Granted, most Windows Mobile phones have more than 12 keys (I was mostly referring to more traditional cell phones).
When the OS gets bloated as its trying to support more features, things slow down or crash and it amplifies the constraints of mobile development. What development efforts should do is focus on the most intuitive UI design (and I shutter when I think of the hours of wasted human labor that is spent trying to find things in poorly laid out interfaces) and lightest-weight execution possible.
