Maybe they want to be more like Apple and bring it all in-house. Imagine a MS designed phone, running WPx and linking to Xbox Live, the MS App store, etc. etc. There are many MS-lovers who would buy-in to that in a big way. My son would by an Xbox-phone tomorrow regardless of what I advised him to do.

If that increased their marketshare, selling the OS to other manufacturers would become more profitable as they could ramp up the prices. If the other manufacturers opt-out, they sell more of their own-brand phones. It's a win-win (big assumption on marketshare increasing).

MS would also get lots of IP rights from such a purchase, maybe they would like to merge some MeeGo code into WP7 = WeeGo anyone? ;-p (joke!)