

You can operate without a local account - source, I‘m on Windows 11 and I‘ve never had a Microsoft account - but it‘s a massive PITA and takes a lot of playing around and disconnecting from the internet during install, and stuff like that.
You‘re right that 99% of people won‘t know/won‘t bother to go through the hassle and that Microsoft through the years have been making it harder and harder to have a local account, but at the moment it‘s still technically possible.
And there‘s still no compelling use-case for the average consumer. Coders and scientists? Can be. But most people don‘t really have a use for it in most situations, even in business contexts. It‘s mostly a solution in search of a problem, and even then it‘s so unreliable that even things trying to sell you it as a solution have to add the disclaimer that you shouldn‘t use it for anything that‘s remotely important.
So even if the costs were markedly less than they are, there‘s still no real path to profitability because there‘s no real call for it.
The only use I‘ve found as a consumer is using something like Perplexity as a search engine. And that‘s not a testament to how good Perplexity is, but instead a testament to how bad other search engines have become. Perplexity just avoids things like SEO and is mostly quite good at finding sources which aren‘t themselves AI-generated.
And…I really see a near future in which AI-SEO becomes a thing and Perplexity et. al. become just as useless as google.