It wasn't an open format and it wasn't documented correctly, making it impossible to make a text-program that could open and save word documents 100% correctly. There was always something that was broken... A bit of the same tactic they used in their implementation of CSS and HTML in IE. To the end user MS products always just seemed to work a little better than anything else, though of course we know that the real reason was of a different nature than just better quality.
And yes, you could save in other formats, but again, Word just magically seemed to be better at reading the other formats as well.
There are so many things wrong with what you said there.
Then please enlighten me.
You are comparing Microsoft Word to a walled garden.
Nothing Microsoft did with Word back then was unusual. Word is not going to use an 'open' format back then because they were not ready. Everyone used their own format back then.
If other programs could not open Word that was their fault not Microsoft. Fonts and formatting were not as standard as they are today and WordPerfect and others had considerable market share.