The issue is not whether WP7 is good or not, many great OSes failed to become mainstream, MacOS is a good example, so is Linux BTW. Several hurdles have to be taken, IMHO being late in the game is the hardest one, not only because the app market will remain behind (MS should have remembered just why the PC became popular) but also simply because of branding : Iphone and Android are the clear winners in the mainstream market and they are both excellent, which makes them very hard to beat.
And tablet aren't gonna help : iOS users have by now invested in apps that they use on both their Iphone and Ipads, they won't easily switch, unless the app makers guarantee that apps can be reused.