It came out with MS-DOS 5, and by that time there were loads of alternatives already available. There were ports of Unix and Big Iron editor programs.

There were loads of native PC text editors, too. SemWare's QEdit had been around since 1985, for example. DR-DOS had had EDITOR for a while, which might indeed have spurred Microsoft into action.

Boxer was a contemporary with MS-DOS EDIT, but that name was a pun on the name of an earlier widespread DOS text editor named Brief, also around for years before EDIT came along.