The Zune was launched in 2006 and discontinued in 2012. Why did that product last 6 years?
I’m not saying Office for iPad is pointless (I use it regularly, so quite the opposite!), but I do think it’s foolish to think an organisation the size of Microsoft’s doesn’t necessarily do things for obvious reasons. Individual incentives do not always lend themselves to data driven objectives.
I think it's unlikely that Office for iPad is a billion dollar investment either. It doesn't change that it might not actually generate any direct returns for them.
Loss-making strategies can ultimately be profitable in a broader sense (if it increases the stickiness of the product on it's primary platforms, keeping away competitors, a strategic moat).
I don't think there's any evidence either way to be able to make any assumptions about the level of interest of the product, and whether or not that justifies it's existence.