Trouble is, you're conflating the distribution mechanism with the payment model. There's no reason a desktop app couldn't/can't implement a pay-as-you-go model; a one-off lifetime/per version payment model isn't the only option out there.

But people HATE pay as you go installed apps. Take Word, (MS office), for example. The way I see it, I downloaded this software, it is fully available on my computer taking up space, but I have to pay you for the key to just use it? Somehow that feels different than going to a website where I don't even have access to the application without paying.

Intellectually, we know that they have to pay to develop it somehow - M$ is still a business. That doesn't help the rage that is instilled by the "free trial has ended" message.