Why did Windows 95 setup use three operating systems?

Way back in April of this year, I linked to a question and answer about why some parts of the Windows 98 installer looked older than the other parts. It turns out that in between the MS-DOS (the blue part) and Windows 98 parts of the installation process, the installer boots into a small version of Windows 3.1. Raymond Chen posted an article detailing this process for Windows 95, and why, exactly, Microsoft had to resort to splitting the installer between MS-DOS, Windows 3.1, and Windows 95.

The answer is, as always, backwards compatibility. Since Windows 95 could be installed from MS-DOS, Windows 3.1, and Windows 95 (to fix an existing installation), the installer needed to be able to work on all three. The easiest solution would be to write the installer as an MS-DOS program, since that works on all three of these starting points, but that would mean an ugly installer, even though Windows 95 was supposed to be most people's first experience with a graphical user interface. This is why Microsoft ended up with the tiered installation process - to support all possible starting points in the most graphical way possible.

Chen also mentions another fun fact that is somewhat related to this: the first version of Excel for Windows was shipped with a version of the Windows 2.1 runtime, so that even people without Windows could still run Excel. Even back then, Microsoft took backwards compatibility seriously, and made sure people who hadn't upgraded from MS-DOS to Windows 2.x yet - meaning, everyone - could still enjoy the spreadsheet lifestyle.

I say we pass some EU law forcing Microsoft to bring this back. The next version of Excel should contain whatever is needed to run it on MS-DOS. Make it happen, Brussels.