Exceptions can be found, but only a few. What is most common under our system is that industries boom, then shake out until there are 3-5 major competitors in any endeavor, plus a host of small fry that will be bought out if they succeed big time. This is no different for software than for other industries, and we have found it to lead to general prosperity. You might think that Science could get along fine without patents and commercial exploitation, but you'd be wrong. Congress doesn't fund NSF because it loves science, but because it loves technological progress and the resulting taxes, national economic power, and military might.
Research universities exist because of government funding.
Commercial labs also exist because of commercial potential. Very little science is currently done with private funding and no commercial motive. In times past, when science did operate at a hobby level, progress was much slower than at present. Science is not the whole of society. I have no problem with that, if it happens.