I've heard that Taker's undefeated streak is a reward for his continued loyatly to the WWE. Aside from Trips, he's the only one who never left the company. Even though technically Michaels never left, he did retire for a number of years. Besides, Michaels is assured to get other perks just because of his close relationship with Trips.
But then, as you guys have already said, no one knows what McMahon's thinking.
I remember this insider rumor that showed how bad-as s Taker was. Reportedly, there was a meeting held during the 90s, that was attended by Michaels and Taker. Michaels at that time (I think this was pre-Christian Michaels) was making a lot of fuss and being a primadonna not agreeing to something that needed a decision. It was said that while Michaels was talking his mouth off, Taker suddenly started slowly wrapping his hand with tape or bandage and calmly said that if Michaels doesn't shut up and agree by the time he's finished taping his hand... You get the drift. Michaels shut up and agreed.