Buggier than WinNT?! I remember WinNT4 having 7 service packs, and after the latest SP, something like 50 more patches only for the RPC, and in the end they recommended switching to Win2K because it couldn't be fixed without breaking compatibility. I'm sorry I can't give any links - they deleted everything.

You probably remember the BSODs due to buggy drivers.

One could argue that an OS for PC (Win9x) doesn't need any isolation. There's only one user (personal in "PC").