According to wikipedia, In mid 2004 development on Longhorn had produced an over-featured, leaky, mess of bugs. Features had been added haphazardly, memory leaks were hard to track down, system performance was terrible.
The XP base code was scrapped in August 2004 in favour of Server 2003 because most developers on the project were veterans of Server 2003 and more likely to produce something much more reliable.
They didn't reset "because they wanted an OS to use the widows server kernel", it was reset because it was a horrible mess of bloated, slow, and buggy code, and they chose to use the Server 2003 kernel because it had the most likely chance of success in a short period of time.
Now I think about what Vista is, how bloated and slow it is, and if that's the reset and improved version of what was originally Longhorn then I can only shudder at how terribly it must have performed.