I'm not actually as mad about this as a lot of people are. At a glance, it seems like all they are doing is allowing Notepad to render Markdown files as styled text. If you apply formatting and try to save it as a .txt, you're prompted to either save it as a .md or lose the formatting.

And formatted text pasted in still shows up un-styled, so one of the most popular uses of Notepad I know of—using it as a formatting sink, dumping the clipboard on it to strip formatting—still works.