The Windows 10 for Devices is really an attempt to let their existing developer base work on things that previously were more in the realm of the Linux/embedded people. It'll never be full Windows with a GUI/etc, think of it as the Windows Kernel with a file system and command prompt... similar to the recovery console CLI. Agreed that it's probably too little too late at this point, but I'm betting it was done more in response from developer requests than from a Microsoft initiative. After all, if you were a fluent C# developer it's easier to have this then to have to go learn a whole different development language/chain and underlying OS.
AS for the PI, comparing it to an Atmel is like comparing an ATV to a pickup truck. For low level stuff (sensors, low level electronics etc) the AVRs/Duino/etc are fine... but as soon as you want to get higher level than that your cost and effort skyrocket. Try adding ethernet and the ability to directly drive 1080P resolution screens to your AVR... then try doing that for $35 US including the AVR itself. They're really designed for two different purposes. Sure there's some overlap, but in most cases they have two different roles and really a lot of the time should be used together rather than viewed as competing devices (Sure you can toggle GPIOs on and off... but try doing multi-channel ADC directly on the PI, for example. It just wasn't designed for tasks like that).