Seems to me it has nothing to do with Apple. They created iOS, and it is up to app developers to make their code and products work under that operating system. If Microsoft wishes to make a version of MS Office for iOS, there is nothing stopping them from doing so.
Have you looked at any other programs designed to work with MS Office files - like QuickOffice Pro or Documents to Go?
Also keep in mind that large and very complex document with embedded graphics and such will never work seemlessly on any current production tablet - the iPad and other tablets simply lack the processing power and the RAM to do that. And their cpu's and RAM are in turn limited by the available battery technology (try to pack too much processing horsepower into a tablet, and it would not run long enough on a charge to be useful).
Tablets are what they are, and what they are not is a full fledged computer replacement.
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