I'm sure a large part of the reason Microsoft wouldn't offer it for free is that, at the time, any effort on Microsoft's part to enter a new market off the back of an existing market would be scrutinized pretty heavily by the DOJ. They couldn't even add virus scanning functionality to Windows because of anti-trust concerns.
He said "at the time", which I guess refers to the difference between Smartscreen's release which was apparently 2006 with IE7; and MSE's 2009 release.
That way even those who ship free software would sign it and thereby make windows safer.
But of course MS isn't interested in that when they can get paid for it.