Apparently he did miss that small section. However, the premise of the article appears to be that MS should by Palm to take their technology and build a new OS that runs on multiple manufacturer's phones and allows 3rd-party software development with the iPhone app store being held up as a model. However, some items of note that should have been included in the discussion:

1. Third parties have been able to use a real SDK (Visual Studio) to develop apps for devices running the windows mobile OS for years before the iPhone came out
2. There are no restrictions on what kind of application 3rd parties can produce
3. 3rd parties can sell their applications anywhere - their own website, a website that collects apps - you don't need Apple's authorization to sell it through their exclusive portal for which they take a cut of the sale
4. Windows Mobile ships with most smart phones - Nokia, RIM, and Apple are the exceptions
5. Palm generally makes two versions of each smart phone already - one with PalmOS and one with Windows Mobile (e.g. Treo 700 and Treo 700w)
6. An OS is not sexy - it's the apps and the user interface that are sexy or not.
7. Windows Mobile has multiple browser options - Pocket Internet Explorer, Opera Mobile, Opera Mini, Netfront, and Skyfire to name just the ones that I've tried. These have different levels of sexiness - and w/Opera Mobile and Skyfire better flash capability.
8. There is nothing stopping a 3rd party from putting a better user interface on Windows Mobile - something HTC has down with their Touch-Flo (aka Manilla) interface. This comes standard on the Diamond and Touch Pro/Fuze (<link>)
9. According to <link>, as of 2Q08, Windows Mobile had 12% of the smartphone market compared with PalmOS's 2.3% (Apple: 2.8%, Linux 7.3%, RIM 17.4%, Symbian/Nokia 57.1%). The article's brief mention of Windows Mobile implied that it wasn't a big player in the smart-phone market.
10. Last I checked, MS is mainly a software company and Palm is a hardware company abandoning it's OS for Windows Mobile.

So the article suggests that MS - a software company - should buy a hardware company that already uses MS's OS as their proprietary OS is dying in order to be able to look sexier - something manufacturers (HTC and their TouchFlo interface) and 3rd-party app producers (Opera, Skyfire, millions of others) already do.

What is interesting is that Apple (and other OS providers like RIM and Nokia) and MS are following the same strategy they used for PCs in the early days. That is Apple (and others) are selling a hadware product, tying it to their proprietary software, and making 3rd-party app writers have their apps authorized before selling them. They are betting that their software will help drive their hardware sales. MS is selling software only, with the ability to sell to multiple hardware vendors. They are betting that once the hardware differences become indistinguishable (like the rise of the IBM PC clones) their willingess and ability to sell to any manufacturer and having a much more open approach to 3rd-party app development will make them the de facto OS for the mobile market.

Frankly, given the history of the PC vs. the Mac, plus the observation that MS doesn't have to build any hardware (i.e. they have half the work that others have), I think its only a matter of time before MS dominates the smart phone market - at least in the US where Nokia doesn't have a strong foothold.