Well, it may affect Office slightly, but not enough to really notice. I remember when I started college I had no idea why I needed, or wanted Office and, after using Office 98 for a year, moved on to AppleWorks for the rest of my time. I didn't need the extra stuff, didn't care for it, and wanted to start using the OS X 10.0 Beta.
Now, the average school tells their students that they need Office, or Word. If AppleWorks was 100% able to open and save word files, properly, and came on all new Macs, well, I'd think a lot of people who would simply buy Word before may hold off, or not buy all together. Microsoft has made a more compelling argument making the edu pricing on the low side, but nothing beats free.