Do you know know many screen resolutions does WP7 support? The answer is 1. WP8 will support 3 screen resolutions. Nokia will not be able to buy any other screen than what is explicitly supported by MS.
The same thing with cameras. Why do you think Nokia put their best camera ever on a Symbian phone? Well, MS' drivers do not support that camera and the WP7 probably can't handle images of that size.
Nokia is screwed, not because MS is setting the SW development but because they have to buy the HW that MS support. And that is not a nice place to be if you are a HW manufacturer.