You cannot make restrictions to the distribution of the source code under the GPL

No, they don't say they will sue (they flat out can't), but they say they will cut off your access to any updates.

Now one could (and I would) argue that sounds like a restriction on exercising your open source rights. However the counter argument seems to be those protections apply only to software acquired to date, and if you deny access to future binaries you can deny access to those sources.

In any event, all this subtlety around the licensing aside, it's just a bigger hassle to use RedHat versus pretty much any other distribution, precisely because they kind of want IBM/Oracle style entitlement management where the user gets to have to do all the management work to look after their suppliers business needs.

You must make the source available to anyone you distributed the binaries to. Where in Red Hats TOS does it say they will sue you? As far as I understand it the reserve the right to terminate the service you are paying for. But your rights to source for the binaries provided are not affected.

You can build a business model on selling it, but you can't stop someone else doing the same.

Canonical seems to make some decent money off of their services.

None are.

When I make this choice, I also change my expectations. The amount of money that is sloshing around in silicon valley is grotesque, and so of course they can throw whole towns worth of developers at just about any problem. The fit and finish of proprietary software is actually pretty bad considering the resources they have access to.

With FOSS software, a small project might be one or a few developers. But can it be good enough. I generally thing a lot of software has been good enough for a long time. A lot of computer applications are basically solved problems -text editing, search and reading, spreadsheets, forums, live chat, asynchronous mail, etc.

A proportion of FOSS users dropping a little money here and there will never give projects the kind of infinite growth expected in silicon valley, but it absolutely can fund small shops doing good, simple projects. Heck, it might even be more sustainable than the venture-capital-sell cycles that require every company to be perpetually exhibiting exponential growth or die. Yes, I'm aware that the bigger FOSS projects are only solvent because they make money from corporate customers. It is an issue that corporations seem to have nearly all the discretionary spending power, but thats for another discussion.