Where Word documents default encrypted or protected in any way? Nope. Could you export to common formats? Yes.
It wasn't an open format and it wasn't documented correctly, making it impossible to make a text-program that could open and save word documents 100% correctly. There was always something that was broken... A bit of the same tactic they used in their implementation of CSS and HTML in IE. To the end user MS products always just seemed to work a little better than anything else, though of course we know that the real reason was of a different nature than just better quality.
And yes, you could save in other formats, but again, Word just magically seemed to be better at reading the other formats as well.