And how would you pay the 'employed' programmers that created the software if not by charging for the software

Tons of open source software is being created by professional employees of companies today. It's not some hypothetical, this is today's reality.

And it's mostly about profiting from related services, paid support, training, consulting etc.

I realize it cannot work the same way for some minor app by a tiny company and it does create wrong incentives sometimes (you need to make things just complicated enough so they need to hire you for support and training, but not so complicated that it's unusable).

(By the way, nothing forbids you from charging for the software, source or binaries, even if you license it under a free software / open source license. "Free" is a catastrophic naming choice, as it doesn't refer to zero price. It is true, though, that anyone who buys it once can then redistribute the software for zero price, so you'd only get money from people who buy directly from you, instead of obtaining a copy at zero cost from somewhere else.)