Only because Microsoft made that stupid design choice, there is no reason it needed to be part of the OS. The numerous alternative browsers that work perfectly well illustrates that.
Yes, in recent years. However, Microsoft has being using IE to display information for a long time, it's just that recently it has become progressively more tied to explicitly IE to the point that things freak out and crash if you disable IE.
It wouldn't be a problem if Microsoft had been using the 'browser' as an integral part of the OS for displaying information etc. However, Microsoft is using IE as an integral part of the OS.
I remember back in my days of using MSN messenger it was easy as a drop of a hat to cause a BSOD by disabling IE and clicking the link in MSN to my hotmail inbox. It would try to launch IE, freak out, crash MSN, then Explorer and then you'd get a BSOD. From what I've heard, this problem has somehow gotten worse.
They would have multiple codebases to maintain then.
I think they were the IE engine for the main explorer folder view in Windows 98 - all the active desktop and custom folder backgrounds and theming the sidebar which slowly vanished in XP and onwards was MS-HTML and CSS based.
It wasn't a stupid design decision, it was just a design decision.
