It's not pretty, but both Pages and Numbers are pretty powerful in their modern incarnations. If you actually need Microsoft Office, then you need it, but a lot of people who don't think they could get away with just Apple's freebies probably could.
(Disclosure: I write 99% of my stuff in Emacs now, so I'm not going to go that far out on a limb for iWork. It's just that it's the best "Works"-style suite that I've used.)
I also like Apple's office suite, the problem is network effects. I'd even argue most people don't actually need MS Office. The amount of people using PowerQuery, VBA, etc. is probably less than 2% of users.
The problem is, because everyone else (in business) already has and uses office, if you want to collaborate, that's what you have to use. Open file formats didn't win out in the end.
This is absolutely the problem - with the added issue of platform support.
I’m the only Mac user in our company of 15, which means I’m also the only person that can open a .pages file. Anyone can read a .docx, and if authored in word it will actually look the same on both computers.
Is it 2% who author content using those tools, or are you also including anyone who might need to open and use a spreadsheet using one of those technologies?
It's not "the end" yet. Many governments and sufficiently motivated orgs are switching to ODF - it's only over for proprietary file formats that pretend they can stand toe-to-toe with docx. By eschewing open formats you're making all the mistakes of .docx with none of the upsides of the network effect.
And you hit the nail on the head with the whole 'Office = the document always opens/looks right' thing.