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you guys are looking at it for the consumers view of Microsoft has to much money... blah. but, from a business stand point your job is it protect you brand if you ran MS you'd do everything in your power to protect your name or brand. if not people like this kid would just make you company look band spreading rumors. AOL does it all the time you basically can't register any domain with AOL in it. I'd have to agree with MS on this, even if he admits it or not his intent was to register a MS name and then to as for $10k, there is no way he'll win.
it's the same reason why you can't name your company City Bank cause it would confuse consumers with Citibank
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