IE 4 was a better browser than Netscape. I think we may finally be distant enough that we can drop our allegiances and just admit that. Netscape did not randomly decide to drop everything and rewrite a browser, they did it because they were trapped in a terrible, terrible code base that could not easily be extended to grow into the future. Netscape "layers", their answer to what we at the time called DHTML and today don't even have a name for it because it's just how the web works, were atrocious, and it was directly a result of their code base not being able to do anything else.

Netscape was boned either way... not doing a from-scratch rewrite would still have doomed them to being stuck behind Microsoft for a long time. It would have allowed them to keep making releases instead of just going silent, but they still would not have been able to be as good as IE. And they'd have still be stuck hard by the fact that Microsoft monopoly'd the price of a browser down to 0... and Microsoft would probably have monolopy'd the price of a server down to 0 too even faster than it did, given the chance.

Microsoft was "stagnant" because they could be stagnant because they had won. The judgment at least prevented them from pushing home the advantage, because they knew they'd be slapped down. This is what I'm saying was probably the most important thing about it, and it's easy not to see what "didn't happen", but I suspect that Microsoft would have done yet more "evil". Perhaps it would have gone poorly, but it would have been foolishness for anybody to count on that. (What we know now about Microsoft and Ballmer's leadership makes that a safer bet, probably, but we didn't know that at the time!)

I think people look back at the world in which Microsoft was slapped, and see a world where bad things didn't happen, and don't realize that, due to second-order effects, there's probably more relationship between those two things than they realize, even if obvious first-order effects are missing (like, Bill Gates never rent his clothes in twain on national TV going "Woe are us, for we are injunction'ed!"). In the end Microsoft's dominance would have been cracked sooner or later, sure, but in the long run we're all dead; no policies can be written based on that theory.