I don't remember licensing being an issue in 2002, when I first started seriously experimenting with desktop Linux. Qt being dual-licensed under GPL was generally seen as good enough, since it meant that KDE could fork it if they needed to. There were several major distros running KDE 3.x out of the box - notably, SuSE and Mandrake.

I think Ubuntu went with Gnome because back then it was perceived as the less configurable and flashy, but also less confusing of the two. KDE 3 was for those who wanted to configure everything - the "power user" crowd. Gnome 2 was more spartan (and became more so over time - I remember the outcry when they replaced the path textbox with breadcrumbs!), but mostly "just worked" in ways that people coming from Windows or OS X could readily understand. And Ubuntu was supposed to be the Linux distro for casual users...