I can respect the value of point 1 - that’s nominally why we have .DLL files and the System32 folder, among other places. There are means to share libraries built into the OS, people just don’t bother for various reasons - as you said, version differences are a noted reason. It’s ‘inefficient’, but it hasn’t hurt the general user experience.
To point 2, the answer for me is simple: I don’t trust upgrades anymore - that’s not an OS-dependent problem, that’s an issue of programmers and and UI developers chasing mindless trends instead of maintaining a functioning experience from the get-go. They change the UX, they require newer and more expensive computers for their utterly pointless flashy nonsense, and generally it leads to upgrades and updates just being a problem for me. In a setting like mine where my PC is actually personal, I’m quite happy to keep a specific set of programs that are known to be working, and then only consider budging after I’m sure it won’t break my workflow. I don’t want all the software to update at once, that’s an absolute nightmare scenario to me and will lead to immediate defenestration of the PC when any of the programs I use changes its UI again. I’m still actively raging at Firefox for going to the Australis garbage appearance, and I first moved to LibreOffice just because OpenOffice switched to a “ribbon”. I’ve had that same thing happen to other programs. I’m done with it.
Once I decide I’m going to continue using a program for a purpose, I don’t want some genius monkeying about with how I use it.
And as far as security, I can use an AV software or malware scanner that updates the database without breaking the user experience. I don’t need anyone else worrying about security except the piece(s) of software specifically built to mind it.
If I have to go into DOS to do something a normal user wants to do, the GUI OS is a failure.