Sure, it's obvious why they do this. Unlike drug dealers (who don't actually give school kids free crack, that makes no economic sense) it does make sense for Microsoft to ensure every kid who knows how to do rudimentary word processing knows Word, etc.
Nobody is under any illusion that Microsoft just really likes universities for some reason. But on the other hand, we did need lots of this stuff and it's very cheap, budgets are tight and it's not as though hand-rolling even more stuff would be cheaper - we do hand roll some things where it makes sense.
For example, periodically senior people say "Why do we spend $$$$ on a supercomputer? Surely we could rent one from the cloud?" and we (well, not me, different group same department) go OK, we will cost that for you. And they get Azure, Google, etc. to quote them for what they need a supercomputer to do, and then they present this, "The Cloud providers can do that for $$$$$". Ah, that's more money. No thanks, we will continue to run our own supercomputer.
It's not even close. Cloud supercomputer is great if you need the supercomputer for six weeks to do a special project and then you're done with it, the Cloud provider saves you a lot of money. But the University needs supercomputers all the time, so the numbers do not work.
First analogy I thought of were stories about drug dealers giving away free samples to schoolchildren to hook them up before asking for money.