As an IT tech, when we work with other peoples computers, we find they don't have images or backups. So, that is why we sometimes have to fight to "remove" what happened to them rather than restoring an image or starting from scratch.
As far as whether Microsoft Security Essentials/Windows Defender is great, bad, basic or full featured...well I think we all realize that it is a free product and is intended to provide an adequate level of protection for the greater user base. I would think it goes without saying that if you torrent, pirate, surf porn or do lots of questionable things on the net, you probably realize that you should "invest" in a more fully features bells and whistles type product. It's pretty common on the web to find that MSE/Defender has not been ranked at the top: Microsoft Security Essentials Tanks Another Antivirus Test. For my surfing habits, a low/no cost basic option is sufficient.
As far as this randomware goes, I've seen it once before myself. My boss is currently dealing with it on his son's home computer.