Yes, M# is what came out of it, and it's possible that the M# additions to C# will become a reality, or at least some of them. I don't think Microsoft will blast away the thing that keeps the Windows revenue rolling in, but languages like M# (just as secure and sandboxed in .NET by default, but execution should be much faster than something written in C#) which are backwards compatible with things written in C# without any changes to the C# code could be a real boon for running across all form factors and device types, from the highest-end Intel CPUs down to smaller, less powerful Atom and ARM devices. I think it's interesting to see where this might be headed with Microsoft's desire to reduce the number of variants of Windows it uses across the desktop, tablet, phone, and XBox devices.
Note - this is all my opinion, I have no inside knowledge.
