The more I look at Windows Azure (while dealing with IIS deployment automation issues in TeamMentor) the more I fell that Windows Azure is what IIS 7.5 (or 8) should be.
What is really good about Windows Azure is its deployment and versioning capabilities (you can even deploy via git pushes these days). And apart from the webserver bit, most of IIS' Gui is focused on website deployment (which is what Azure does really well).
But with IIS, there is very little scripting and automation, and with Windows Azure , scripting and automation is part of the default workflow.
Since I don't work for Microsoft (and will not sign an NDA) I don't know the inside story, but I bet that the IIS and Azure teams and very different, and it was not politically possible for the Azure (i.e. .Net) team to take over the IIS GUI and workflow (even though that is exactly what would make sense from an IIS user point of view).
In fact the Azure team took over (virtually) IIS, since Azure runs on top of IIS (they just hide it very well :) )
