It is an obvious maneuver, to be fair to Nadella. Not only will this push more over to subscription based word processing, but it also closes one of the easier avenues useds have to avoid aggregated data farming. Their next move should be to turn Notepad into a complementary tiered program:
Tier 1) Use at no charge, but your data pays for it instead.
Tier 2) Notepad becomes an extra pay to unlock feature of 365.