I think this argument could go either way. As a "commodity" WP7 phone maker, Nokia might be able to get 20% of the WP7 market on brand recognition alone. But a crappified version of WP7 might earn them 0% of the market instead.

As someone who values a fairly broad oligarchy of phone ecosystems, I'm frightened that Nokia will have 20% of a WP7 market that is perhaps a little more than one or two million devices per year, and stagnant.

WP7 (or 8 for that matter) isn't going to be helped in this kind of scenario by a bleeding vendor that can't sell more than a few hundred thousand devices. As consumers, we're not going to be helped by the death-by-a-thousand-downsizings of Nokia (a business that has a good record otherwise of innovation in technology and market development, at least until the last few years) and a side show of a user community that can't support development of innovative software and business models.