Wow, that's a lot of consequences for what probably seemed like a simple, obvious design decision. It's rare to see an honest acknowledgment of this, but it raises questions like "what other early, obvious design decisions make Windows goofy today?" Drive letters? Backslash as path separator? Magic file names like CON, LPT, AUX?
I think it's worth giving drive letters some credit. It makes it very easy to mentally designate a drive, whereas people can get confused about the concept of UNIX-style mount points since people don't mentally distinguish between a regular directory and a mount point (they'll look both the same).
Also Windows has had the ability to mount a drive at an arbitrary location for a while now (so not just a drive letter), but as far as I'm aware it requires the command line to do so.
TL;DR: Unix inode indirection permits clean file replacement without overwriting existing copies or disrupting running processes. Windows' file system architecture lacks this concept. In-place upgrades aren't a realistic option for Windows without some serious contortions and caveats.