I agree with you in that microsoft doesn’t have any particular reason for why they _should_ support the bill. However, I think it's a little disappointing that for 2 years supported the bill, but now seems to have bowed out - and it's not that they're against they bill, they're just not being neutral and not actively supporting it - due to pressure from a local large church. (And I hates me them church folk. Not really. Just the crazy ones.)
The main reason for no longer backing the bill is MS wants to respect the opinions of both sides of the issues, and frankly there's no way to do that if you're going to take a side on a case like this. That in itself is a perfectly fine reason for taking a neutral position; I don't have a problem with it. ‘Cause like Matt said, it's not MS's fault, it’s just how things have worked, even if it’s not the way they should. But the reason I call bullshit is that they didn't take this neutral position until a minister threatened to start a boycott of MS products, which seems rather a coincidental time to also decide, "Oh hey, we should probably be neutral."
But on the other hand (perhaps the more reasonable and less emotional-snap judgemental hand), there's the point that it could have just been that with the church making a big stink about the issue, they realized that they weren't making a smart decision in taking such a prominent stance on this very controversial bill. Plus, MS still does good by offering equal benefits for all of their employees; at least they are leading by example, and we can only hope that more companies will follow suit.

Cross-posting my reply to Terrance over at The Republic of T:

It's a matter of turning righteous anger into the right actions. In its policies regarding gays and lesbians at its own company, Microsoft remains "our friend," and we seriously need to keep that in mind. If we interpret any ratcheting-down of MS's support for the community as wholesale abandonment, and abandon Microsoft in turn, we send a bad message to any company that is considering supporting gay rights. If we turn this into a battle with another of Microsoft's customer bases for "the soul of the company," then Microsoft (and others) will reasonably assume that it wasn't worth stepping into this matter in the first place. And that's not what we want.

A Los Angeles-based gay and lesbian organization has asked Microsoft to return a four-year-old award for its stellar record on gay rights. Who's the fair-weather friend here?

Our best response isn't a choice between attacking Microsoft and shrugging this off. Our best response would be to identify who our chief antagonists are -- the Washington legislature? the church that threatened the boycott? -- and then figure out how to best win over or neutralize those antagonists. Alienating all our allies because we don't consider them tough enough is not a strategy.

Progressives, in general, have this tendency of looking 10 years down the line at the worst, most extreme possibilities on the horizon, and shrieking about them in bloody terror till people just start tuning us out. Yet in the long term, things are getting better for us (gays at least), not worse. Even as 11 states vote to preemptively take away rights we were never going to get anyway, other states have started voluntarily giving us rights we never had before. As we decry Microsoft's weakened position on gay rights, we fail to notice that even without MS, the bill -- which has been around for the last 25 years -- came closer to passing than it ever has before. If gays and lesbians in Washington could have convinced just one Senator to switch, the bill could have become law. I believe the focus on Microsoft just distracted the queer orgs from their true purpose.

(Warning: Mixed metaphor overload to follow)

Matt writes: "Alienating all our allies because we don't consider them tough enough is not a strategy." Yet isn't this the problem coalition politics have always faced? To paraphrase James Joyce, the democratic party is the sow that eats her own farrow. The left's cobbled-together constituencies have suffered from this death-courting instinct -- let's call it "terminal purity" -- for years. What makes things worse is that outrage too often fills the void left by power. Politics in general is a problem of getting one's hands dirty where one has to in order to get things done, and keeping them clean where you can to stay legitimate. Continuing to partner with and support MS is hardly a case of dirty hands. There are better ways to influence their policy then by throwing a temper tantrum, however understandable that may be.

The problem, I think, is that there's nothing most of us can do about it. As a gay man who doesn't live in Washignton state, there's little affect I can have on the Washington legislature or the church involved. They don't extend into my back yard. I can't do more than write an angry letter However I still have some investment in bills like the one in Washington happening. The only player here that I might have some influence with, as a consumer, is MicroSoft, because they're the only player that reaches beyond Washington state.

Otherwise, there's little I can do in this specific situation than just sit here and shake my head. Maybe it's not my problem, because I don't live in Washington state.

On another note, I think we still have to figure out what to do in situations like this, where a major ally goes neutral. On bills like this, one of the most powerful lobbying tools we have is the ability to show broad corporate and business support. We can wait and see if anyone follows in MicroSoft's footsteps, but we'll probably come up short if we do; especially if MicroSoft is able to walk away without paying a price on some level.

Make it easy for MicroSoft to walk away, and others won't have to think twice about it. If we lose the ability to show broad corporate and business support, we lose an imporant tool in arguing for non-discrimination bills like this one.

That sense of isolation and abandonment you feel isn't limited to gays, Terrance. This is the nature of -- Tim said it -- coalition politics as it's played in America. Every liberal constituency, from the gays to the pro-choicers to the environmentalists, often feels powerless, too small to effect genuine change. And that's partially because we isolate ourselves, obsessing over our pet issues instead of uniting to forge a grand strategy.

In situations like this, our problem is that our best "major ally" is Microsoft. That's not the way it should be. Microsoft is always going to act in the best interest of its bottom line, above all things. While we should welcome and seek the support of corporations, our first allegiance and our strongest alliances should be with other grassroots constituencies. With a strong grassroots coalition, broad corporate support will follow.

Please, no one should get preferential treatment because of their perversions, or lack thereof. This is ridiculous, and I would hope that the right person gets the job, the one with the best qualifications for the job.

Never should we have to put a person in a position becuase they are gay, or black, or not.

If so, they please include us married hetro caucasian men, without children, as weseem to have no rights in anything anymore. Except pay child support, we got that right.