That's absolutely not the plan right now. They can make (at least) 4 AA games for the price of a AAA game in significantly less time. They bought studios that were cheap and good at operating on budget and on schedule so that they would have a stable of developers that operate cheaply and on a reliable schedule. AAA game development is long and complicated, and MS simply won't have the resources to do what you are talking about, even if they increased the size of all of heir studios by 50%.
We are not returning to the Xbox of the 2000s where money was no object and losses are largely irrelevant. Spector sold Nadella on staying in the game space by promising that becoming the Netflix for games would mean a profitable gaming division.
As for your back of the napkin math, the issue is the larger the GP user base, the more it will cost to license third party content. Adding in that fact the all major third parties are exploring their own subscription services, you can see the parallel to Netflix runs even deeper: Microsoft needs to start producing a lot of content, fast, so that they can continue to fill out GP as third parties leave it, just as Netflix is doing now.
Don't sell yourself on the idea that MS with GP will be releasing AAA game after AAA game. It's straight up not possible, and wouldn't be for a very long time.
I absolutely think we're returning to the Xbox of the 2000s where money is no object and losses are largely irrelevant, at least in the short term. You don't purchase seven studios, build two studios - one of which is in the bay area, tack on a 150+ new team onto a recently acquired studio, have your eyes on more acquisitions, significantly bolster the workforce of existing and newly acquired studios, charge $10/month for unlimited access to all of your first party releases, cut into your Xbox Live subscription revenue by tacking it onto GamePass with GamePass Ultimate, allow people to purchase GamePass Ultimate for three years at a rate that's pennies on the dollar, acquire Twitch streamers for large sums of money, etc - unless you're loosening the purse strings to do an all out blitz to cement yourself within the industry.
The Netflix model worked at its best when there were tent pole releases with lesser more consistent releases to bridge the gap between those marquee experiences. Love it or hate it, this is an industry that's largely dictated by its AAA titles, and without those pillars defining the service - Microsoft is going to be doing its subscription service a disservice. I'm not saying that it's going to be a service that's primarily represented by AAA titles, simply that 3-4 AAA titles a year is absolutely a reasonable end goal once Microsoft's first party stable has largely settled into place.
If a AAA title takes anywhere from 3-4 years to make on average. 3-4 AAA titles a year would mean they'd need ~12 studios capable of AAA development? They currently have eight studios that are absolutely AAA-calliber studios, and three studios that are capable of AAA development - but may or may not choose to make AAA titles. Assuming they're not done acquiring or growing their studios, I'd say they're closer to potentially realizing that level of output than you give them credit for.
And I don't think Microsoft will have issues fleshing out GamePass with 3rd party titles. The Publishers who are in a position to offer their own subscription service are: EA, Ubisoft, Activision, etc. Basically a laundry list of Publishers whose games are already not represented on the service. There's a number of Publishers who aren't prolific enough to craft a subscription service of their own, and would ultimately be more successful by participating within an existing platform with an already established user base.