If Courier was so cool, why wouldn't Microsoft continue to develop it? I think the problem was one of timing. The concept video of Courier shows a very innovative and integrated software interface. But what is the operating system underneath it? There are several possibilities, a scaled-up phone OS (like the iPad), a scaled-down desktop OS (like the HP tablet with Windows 7), or some custom platform.
A custom OS platform of some type would draw fire from just about all the other groups at Microsoft. They would be lobbying to have their platform used in a product that cool, and might well prefer to kill the product than to release it without their group playing a part. It wouldn't be the first time that Microsoft killed a good idea because of internal company politics. But even when a cool product teams up with an existing Microsoft team, that guarantees nothing.
No matter how stellar the built-in software is, Microsoft would want the ability for third-party developers to extend the platform. That also offers a way to create a continuing revenue stream similar to the App Store. Apple leveraged its iPhone apps to be able to have software available for the iPad. Microsoft would need to do something similar.
Let's say that Microsoft followed Apple's lead and used a phone OS for Courier. The current Courier prototype would probably be using Windows Mobile 6. That would be a problem because the platform that Microsoft would really want, Windows Phone 7, won't ship until the end of this year. Even then, trying to simultaneously release an OS for two very different form factors would be a lot of work; remember that Apple didn't release the iPad until more than two years after the original iPhone OS was released. If Courier was delayed far into 2011 after the release of Windows Phone 7, that's an eternity. Who knows what the mobile device market will look like by then.
Another possibility, Courier using a desktop OS, would raise other concerns inside Microsoft. Courier has essentially built its own unique user interface and wouldn't necessarily need or want any of the user interface that Windows 7 offers. It's not even clear that Courier would expose anything that looked like Windows 7, or allow standard Windows applications to run. If all Courier needed was the standard Windows plumbing, that could be done with Windows Embedded.
We don't know where Courier was in its development. Let's say that the software was as complete as the demo video shows. Even if that was the case, there is still a lot of work to do because Courier development isn't standard Win32 development. That means Microsoft might have seen the need to create an SDK specifically for Courier, and they may not have been willing to do that. In another year or two it might be time for Courier, but Microsoft isn't ready for it right now.