I don't think microsoft makes that much money from customers buying their OS directly, but rather from OEMs installing Windows by default on the laptops/desktops they are selling.
Never once have I met a person buying a standalone windows upgrade/windows OS. Either they end up buying a new computer, they stick with whatever was installed on their computer (hello, XP/Vista users), or they illegally download the upgrades.
They definitely sell retail copies of Windows, and someone must be buying them, or else I can't imagine the retailers would bother stocking them.
For example, a good amount of the people that have Macs also need to run Windows virtual machines (or Bootcamp), and the primary way to do that is to buy a retail copy of Windows. I can't imagine that's a very high percentage of revenue, but I wouldn't say that nobody buys Windows directly.
If you illegally download upgrades, then you're almost certainly infecting your computer with significant malware.
Do people not care about this?
I'm not a big Windows fan (I've run Linux as my primary OS for years), but I've bought several Windows OS packages over the years for work (testing software).
Never once have I met a person buying a standalone windows upgrade/windows OS. Either they end up buying a new computer, they stick with whatever was installed on their computer (hello, XP/Vista users), or they illegally download the upgrades.