Is Microsoft capable of making a good OS? I think so, they have more than enough resources, that's for sure. But I don't think it'll ever happen. Microsoft are in a monopoly position, and they want to keep it that way. They do not need 'good' products to do so. They just need to make their users upgrade, and they're doing a good (ie. bad) job of it so far.
Whether their OS is good, crap or shit come release day, is barely a concern. They're not trying to make a good OS, they're trying to squeze every little penny out of the market as possible. And for that reason, I can't see them making a 'good' OS.
However, the competition is getting better and more recognised. Microsoft, for the first time in a long time, will soon NEED to produce GOOD products, or they will suffer big time.
Now Apple, they have (arguably) a very good OS. But they need to, in order to compete. Given the opportunity, they would probably love to take a monopoly position just like MS has now. Would they ever release such great products after that? I would doubt it.
So yes, I do think MS is capable of making a good OS. Like Siplus said:
Yes. MS _IS_ capable of makeing a good OS, it just wouldn't help their business of perpetual upgrading. In fact, making a good OS would be hazardous for microsoft.
They're not interested in making a 'good' OS. If they were, their next OS would ship with Firefox in place of Internet Explorer and Apache in place of IIS, et cetera, ad infinitum.
But Microsoft have bigger intentions.