Because the new guy in charge used to work for Microsoft, of course. Nokia needed an outside ecosystem and the only real two choices were Android and WP7. Sure they could have pushed Meego or asked Samsung to use Bada, but in the end Meego is pretty much Linux and Bada helps a competitor. WP7 and Android would have been the only ones in the running and when viewing Android's legal troubles combined with Microsoft's patent portfolio, WP7 was the most obvious.
Perhaps.
But back before it all came out, I seem to recall clearly that Nokia said publicly they were heavily invested in the new Symbian and that's why weren't going to change to anything else.
And while we tend to think of Symbian as a lesser feature phone/almost kind of OS in general, we have one regular member here, ElasticNinja, who was quite familiar with the new Symbian and was able to show that it was a worthy product.
Yet - after Elop - that entire segment was gutted from the company, and a major segment of their country's economy was in turmoil.
I think only the Nokia board knows for sure - but I think from reading it while it happened that Nokia got more than bargained for Elop - they got Microsoft as a new overlord and no turning back.
As for timelines - I don't recall the big patent issues with Apple at the forefront when all this went down. So, either you are right and Nokia had good insight on that - or - there's still more to the story.
Much as I personally don't like the Microsoft phone approach - if it ends up as a quality product, then that creates competition and we consumers all win.
I keep reading Nokia owners on our forums raving about the camera quality - gotta admit, from those reports and the universal agreement posted as follow-ons, I am jealous.