Sorry about the inflammatory "hydrogen bomb" example - I couldn't think of a better way to express the thought (though maybe that's no excuse), but now I can: when looking for examples of companies that were harmed by opening sourcing their product, it's not the number of examples (find just "one"), but the proportion harmed, of those who open sourced their product. The thing is, not many companies have done it.

Netscape open-sourced their browser... that didn't work out too well for them (but there were other factors). Several companies are based on open source (Firefox, Red Hat), but it was open source before they came along. Some companies do open source their product, once it's old (your id e.g., there's also ghostscript). Cynwin open source their stuff, but they do it by selling services.

BTW: as the poster you replied to: I began as open source, but switched to closed source. Why? I found it very frustrating and disrespectful when people said they would buy a commercial license (I dual licensed), and then took three months to buy it. I clearly wasn't a priority - they didn't need to do anything; I was dependent on their goodwill. (I wouldn't have minded if they didn't tell me they were going to buy until later - I just found the waiting very difficult. Maybe this is a character defect, or I wouldn't have been affected if I had many many sales going at once... ). Anyone, I switched to closed (at the same time as a complete rewrite that was needed anyway), and immediately started getting several times as many sales.

Open source is tantamount to giving it away for free - make no mistake. (you've said you don't want to give it away for free; and that you don't believe open source necessarily means that - this is just my opinion here) You need a business model that works with that, such as: sell a service/maintenance; sell add-ons/upgrades; advertising (e.g. TV; google; firefox).

Your point about "pay it forward" gestures of goodwill - or just plain doing something worthwhile and good - does not mean you have to give it away for free. If you have created something great, or made something people want, or improved people's quality of life, or made something better, or righted a wrong, or fixed something that was broken, of helped people to do what they need to do - you have done something that is good. It's not just a gesture of goodwill, it's actual good. I think the focus needs to be on making something worthwhile in the first place - price comes afterwards.

I think their are two very basic pricing concerns, with respect to social good: (1). price it low enough so it's worth buying for the values it gives, and it's affordable for anyone who needs it. Too high, and you prevent some good you could have done - you can have different prices for different value given (e.g. per seat, functionality); and for different people (e.g. zero for charities); (2). price it high enough so that it's worth your own investment in doing it, and that you can afford to devote the needed time to it without starving etc (same arguments as above).

Within those two limits, anything goes, including giving it away for free if that helps.

Lastly, an exception: another way of doing good is just by price - Microsoft's DOS was cheaper; PC clones were cheaper than IBMs; web apps are cheaper than desktop apps. Often, a new conception of the whole business can reveal a cheaper way of doing it. These things are good because they make them affordable to more people, for more purposes. I'm not sure on the goodness of making something even cheaper that is already affordable to everyone... I guess it is good, but
not as good as making it cheap enough to be worth buying in the first place; or, more importantly, creating the valuable new thing in the first place. Maybe it's just because I think the latter is exciting and cool.

for one discussion of "be good": http://www.paulgraham.com/good.html