Well, to be totally honest, MS did Apple a favor by not making IE for Mac anymore. IE is an awful browser which was designed for two purposes: Kill Netscape Make the web proprietary (i.e. broken in a way that's favorable to MS) On the first goal, they succeeded completely. As for the second, that's still an ongoing fight. Firefox, Safari, Opera, these are all quite standards-compliant compared to IE. For example, try taking the Acid 2 Test. It measures CSS compatibility in modern browsers. First try rendering in IE 7, then Firefox 3. Which renders better? How about Opera 9? Safari? Konqueror? Flock?
They decided IE had twisted standards enough to their advantage that there was no benefit of developing it for Mac OS any longer. In other words, there were enough "IE only" websites to possibly persuade some Mac people to leave Apple for MS.
In 1997, Apple made a 5-year agreement with Microsoft to include Internet Explorer with the Macintosh operating system. After these 5 years, they where creating their own browser called Safari. It was then included with Mac OS X from 2003. So because Safari was then bundled with Mac OS instead of IE, there was no need to use IE on the Mac anymore. More information here
MS had stopped updating IE in a major way on the Mac long before 2005 though, as the latest build was 5.x.
