The reason this happened is that while Sinofsky had the maniacal power and force of will of a Steve Jobs, he lacked Jobs' best gift: An innate understanding of good design. Windows 8 is not well-designed. It's a mess. But Windows 8 is a bigger problem than that. Windows 8 is a disaster in every sense of the word.
This is not open to debate, is not part of some cute imaginary world where everyone's opinion is equally valid or whatever. Windows 8 is a disaster. Period.
Paul Thurrott shares some of his inside information, and it's pretty damning. According to him, Sinofsky's team - even up to his major supporter, Steve Ballmer - were removed from the company after it became clear just much of a disaster Windows 8 was.
I agree with his conclusion: razor-sharp focus on productivity, Windows' number one use. The desktop side of Windows 8.x is pretty good as it is, and has been progressively getting better with every update. I would go one step further than Thurrott. Windows 9 (desktops/laptops) and Windows Metro (tablets/smartphones). These two can still be one product (e.g., connect a keyboard/mouse/monitor to your x86 smartphone and it opens the desktop), but they should be entirely separate environments.