I'm going to apologize to Martyn in advance, because I am about to destroy his entire argument:
1. This is a unifying experience, not just a layer on top of Windows. On tablets, especially ones running ARM, the expectation is that you will NEVER need to run traditional windows applications. You should NEVER need to leave the Metro UI.
2. Just because Apple made iOS and it was successful, does not mean that merging platforms is impossible.
3. Microsoft has been criticized lately for doing exactly what you want them to. They're enforcing strict control over third party manufacturers for tablets here.
4. iOS may be good as a phone/tablet OS, but it's far from perfect. For example, there's the problem of file access. This is such a critically huge flaw that it ensures that I never, EVER create documents on my iPad using apps like Pages. I don't want to sync every time I want a file off my iPad. I also don't want to email it. Dropbox fits my entire lifestyle for documents, and on iOS it's essentially useless. What good is a well-written tablet application if you have no intention of ever using it?
5. This is a stepping stone. This sort of merging HAS to happen. People are already getting lost in the cracks due to different usage paradigms. If Microsoft had the option of just outright dropping support for non-Metro apps, they would probably do so. But it would be the end of Microsoft, so we have this.
6. Keep in mind that Metro, as stated by Microsoft explicitly, is NOT just another shell or a layer. It exists in tandem with the old Windows.
7. Although they demonstrated traditional Office, they have explained that they intend things like Office 365/web apps to be part of the mobile experience. There's absolutely no reason to expect full Office to be the only solution on the tablet.
8. Any ARM-based tablet won't be able to run existing Windows programs anyway, which is actually somewhat of a good thing. It means that Metro will be more readily accepted.
9. The reason they're even demonstrating the ability is so that it addresses all possible usage scenarios. Besides, even in the video they show significant touch UI improvements even on the traditional desktop UI. Click targets were easier, scrolling was easy and bounces when it reaches the end, etc. And that was only a few seconds of footage.
In short, you're being extremely judgmental without reading about what they're planning, how it works, or understanding that this is far from a finished product.