The Windows UI was way better than MS-DOS. But Windows could have been way better than it was. They should have lost the mouse at the get-go. I'm sure that every first-time user of the mouse probably said to himself, why can't I just point? But the mouse came from the sacred days of Xerox PARC and it was a gadget and a market unto itself. Even Microsoft sells them.
A touchscreen interface has always been available in Windows from its earliest days, but nobody used it or even talked about it. Windows used the mouse.
That's the great thing about smart phones. They don't use the mouse. A smart phone with a mouse connected to it would have been laughed out of town. So we have what we should have had all along - our fingers, which were made for pointing, and whishing, and other simple tapping maneuvers. Moving our fingers is perfectly natural, but the mouse was done in by the form factor.
The form factors of smart phones are also responsible for another, more subtle revolution in interacting with these devices. The screen real estate is so small that web app developers have had to structure their processes into discrete steps, where each display involves only one step. Navigation is done from one level to another, not from page to page, and is handled by the operating system.
Consider the Back button in PC browsers, like IE, or even Chrome. Hitting the Back button there will cause a return to the last loading of the page, without regard to the app's structure and state, or the user's intention. That's what I mean about levels. They are defined to the Smart Phones' OS Back history by the application.
The result is a UI which makes you do one thing at at time. Nice. The opposite strategy was encouraged by Microsoft itself in its Office Suite - the first few iterations of MS Project, for example, put forth a terrifying collection of everything on a single screen. Every form and list that could be created and updated in this application was there in frames that could be expanded and collapsed at will. If you didn't know your way around, you were lost. Good riddance to all that.
Of course, the only problem with Smart Phones is the form factor. You can't do everything with them. But that doesn't mean that we'll be stuck with PC's forever. The PC's form factor is too big. The race is underway now, between Google and Apple, to find the smallest form factor that'll let you do everything.
I can see the end of the PC now. And, with it, Windows. Microsoft is Smith Corona, which is history for toast.