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I don't know if this particular invention is is too obvious to be patented -- I'm not qualified to say. I'd be interested in hearing an opinion from a patent attorney who works with this type of invention.
Patents are a complicated issue and I don't have a fully formed opinion about them (and I work for a company that holds a lot of patents). But I find a lot of the discussion about them not to be very helpful. With respect, it often seems like woefully uninformed conjecture about so-called obvious or wacky patents or is thinly-disguised anti-patent posturing dressed up to look like an argument. (TechDirt is a fine example of these offenses, in my opinion.)
1) Won't hold any water in court.
2) Weakens Microsoft's position in court when they start showing how tall their stack of patents is ... all you have to do is show this one out of the stack and the height of the tower means nothing.
I saw this happen in the DRAM industry where they'd just stack up piles of paper to see which was the highest. Then the opposition would pull out ridiculous patents to show which pile was worthless.
Although I don't know what Microsoft's motivations are I understand what many companies are doing when they do this is to project themselves, not be predatory. It's typically small companies, like SCO, Unisys, or Forgent that sue big companies like Microsoft, HP, or Apple for things that should be fairly obvious, and occasionally do so successfully, so Microsoft pulls this kind of crap to protect themselves from some idiot with more time than creativity who creates frivilous patents.
Still, it is crap, and I agree it can be destructive to the creative process, and that the USPTO is largely to blame, but simultaneously it can spur new innovations.
For example if they indeed invented the pagination key (which they didn't), but assuming the patent was valid (which it isn't) and people will be motivated to come up with a better mousetrap, patent it, and sue Microsoft when Microsoft infringes on it. Without the pagination patent far less motivation to better mankind in that regard would exist - and that was the original intent of the USPTO.
I do think this is unrelated to "a means for lazy and litigious people to live off the work of others" ... which is a far worse problem. Many technologies are completely avoided for because of litigious people who have interest in manufacturing something themselves while simultaneously holding the public at ransom for a ludicrous compensatory package simply because they first thought of patenting something that was eventually bound to become obvious.