On the contrary, Linux is in a good position for the same reason you think it isn't. As the desktop/laptop market shrinks to advanced users, it loses the long tail of users who weren't technically capable enough to switch. At the same time, WINE/proton and even some native ports have vastly improved the gaming scene on Linux, and a decent chunk of non-gaming applications too. Sure, there will always be certain business applications that refuse to work on anything but actual Windows, but Linux works for a decent and growing part of the shrinking niche that is "real computers".
Just played some games on Linux Steam yesterday. It works so smooth. The Steam client is actually buggy at times with a tiling WM, but all the games worked great.. even the oned with Proton.
It's actually amazing how well games work under Proton. Even a significant number of multiplayer titles just work, despite anti-cheat. There's some "random problems" sometimes with some titles, sure... but that's also true on Windows. Interestingly the problematic titles are more or less exactly opposite to Windows - new titles tend to work well on Windows and perhaps have issues on Linux (requiring some specific launch options or Proton version, perhaps graphical glitches). Meanwhile older titles are often problematic on Windows, but are less so on Linux. Might just be my selection bias though.
Until and unless Microsoft Office products are on Linux natively and are supported by Microsoft, Linux will never be a mainstream operating system. And that's never going to happen.
The web based Office 365 my university gives us seems to work as well on Linux as any other platform AFAIK (unfortunately that's still not perfect). It did claim to need Edge for some things, but that's relatively minor.
This is becoming less and less true every day. Both online office 360 and gsuite are popular in offices these days with no ms office installed on the device. Outside of specific business roles, I haven't seen it in a long while. I've even run into a medical clinic running on libreoffice.
My Android phone runs native Microsoft Office apps, so we are half-way there.
I am just waiting for Microsoft to give up on Windows-on-Arm and instead create a Microsoft-branded Linux distribution that has an actual Windows subsystem for Linux (that is, a compatibility / emulation layer similar to Wine or Proton to run legacy Windows software).
Decades of backward compatibility makes Windows a resource hog. I do not think it can make the jump to Arm or RISC-V easily.
Every business I've ever been part of in my entire adult life has used Google docs or libreoffice. I genuinely haven't seen MS office since high school.
I worked for a fortune 500, and they used a custom Unix type OS with libreoffice. We ended up using mostly Google docs though.
Ironically enough I've found that O365 works far better on Firefox and Chrome on Linux than it does on those browsers on Windows, and Microsoft O365's support team warn against even attempting to use Windows 10 and Edge.
> Sure, there will always be certain business applications that refuse to work on anything but actual Windows
I disagree with this statement, especially in the case where there's somebody motivated enough to patch Wine to support specific applications.
At the end of the day, Windows applications expect a set of interfaces. As long as those interfaces exist and work as expected, the application will work.
