Good post. I actually think that making .Mac free would bring MORE revenue to Apple.
I posted about that a while back:
http://www.sparkplug9.com/bizhack/index.php/2006/07/13/apple-set-mac-free-youll-make-more-money/
My thoughts on why Apple sold PowerSchool:
http://www.sparkplug9.com/bizhack/index.php/2006/05/26/why-apple-sold-powerschool/
iPods are going to be huge in education ...
.Mac Needs to Be Radically Retooled
Apple Plus Pearson Equals PowerSchool Multiplied